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RPA in Accounts Payable — Challenges and Use Cases

Accounts payable is the amount of money a business owes to its suppliers, who have provided goods or services in advance.

Let’s say that your vendor has delivered goods to you at a cost higher than what you had agreed upon. To get on the vendor’s early discount, one of your employees bypassed the usual purchase orders procedure, and therefore, you are left with no proof to prove them wrong. Ultimately, errors in an accounts payable system can mean errors in financial reporting and damage in relationship with the vendor.

By this, you must have understood that improper management of the accounts payable process can considerably impact a business’s cash flow. To improve aspects of your business, let’s learn some common challenges in manual accounts payable processing and different methods to resolve them with the right approach.

Challenges in Accounts Payable

Businesses face several challenges and issues in their accounts payable processes. Following are some of them:

Challenges in Accounts Payable
  • Managing invoices from vendors

With hundreds of purchase orders flying around, it can be hard to keep track of them all. After all, you don’t want to jeopardize your business relationships by paying late and pissing off your suppliers. Or worse, you could be hit with interest for unpaid invoices and late fees.

  • Missing purchase orders

Buyers can use purchase orders to check the items they’ve already ordered and control expenditures that are agreed upon. Many business owners skip the purchase orders process because they’re time-consuming and challenging to create manually, ultimately leaving them with no proof of their deal with the vendor.

  • Manual data entry

Accounting departments that rely solely on manual data entry risk underestimating business finances. It can lead to incorrect calculation of payments and inaccurate information about profits, which can harm the business’ finances and account payable processes.

  • Problems in vendor management

Whether a startup or an enterprise, keeping good business relationships with your vendors is crucial, that’s especially true if you rely on manual processing to pay your vendors because delayed payments are the easiest way to lose a vendor’s trust and spend a lot of time repairing your damaged relationships.

  • Slow and inefficient processing

Manually processing accounts payable requires a great deal of time and attention. If your internal process is not efficient, it may affect the outcomes by yielding non-optimal negative results, adversely affecting your business’s finance.

  • Payment errors

Suppliers will often resend a second invoice if the first one hasn’t been paid off immediately, and you can mistakenly end up paying twice. Duplicate payments can harm your cash flow, and without knowing which invoices have been paid, you will not be able to initiate refunds from your vendors.

  • Maintaining manual records

Research by CFO indicates that manually processing paper invoices increases labor costs by an average of 62%. No matter how well you maintain your manual records, it can be tedious and time-consuming to retrieve and update them on time.

Use Cases for Accounts Payable Automation

Robotic process automation (RPA) is the technology that allows enterprises to automate their business processes using software robots or “bots.” RPA can be used to automate monotonous and routine business tasks; therefore, the functions that are more suitable for RPA in finance and accounting includes:

  1. Invoice approvals

The idea behind automating invoice approval and PO matching is simple: If you can eliminate human intervention from the process altogether, then you won’t need people reviewing invoices or looking up purchase orders when they arrive. You’ll need a system capable of pulling data from one place and pushing it into another — automatically.

2. Invoice data entry

Automating invoice processing using RPA solutions will help you convert the invoice data into a machine-readable format and update all relevant fields in the accounting system, such as the transaction date, account number, tax rate, etc. It saves time entering data manually into the plan and ensures data accuracy.

3. Payment execution

Implementing RPA in finance and accounting can save time and money by reducing manual processing steps and eliminating the late fees and finance charges, eventually improving the cash flow. Accounts payable automation also provides businesses with one central location to select any payment option, making it easy to pay electronically and reducing the risks and costs of every payment.

Conclusion

If you’re facing issues resulting from disorganized accounts payable processing, a comprehensive solution that automates accounts payable processes can bring order to your practices. Automating accounts payable processing can reduce errors, eliminate unnecessary delays, and allow you to concentrate on building business relationships with vendors.

Maruti Techlabs is a leading provider of Robotic Process Automation (RPA) services and consulting and implementation services across the globe. Our business focuses on providing all-rounding high-quality RPA services to our clients.

We have a highly skilled team of process experts and technology professionals who can bring the best-in-class results for organizational benefits. Our only aim is to offer business value enhancement solutions through RPA service offerings.

Want to know more about RPA? Get in touch with us, and we’ll take it from there.

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Maruti Techlabs

Maruti Techlabs

We are a digital product development company and your guide on the digital transformation journey.

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