Benefits of Accounts Payable Automation
From the CCI Review 2022/2023-1 September 2022 issue of the CCI London Chapter
Dealing with invoices isn’t always a fun experience. The time spent receiving, coding, approving, recording, and paying invoices can add up!
According to a PayStream Advisors study, a non-automated Accounts Payable (AP) process on average takes 45 days at a total cost of $15 per invoice. Think about that next time you’re cutting a $12 cheque!
Moving to an AP automation platform can not only reduce the time and cost of dealing with invoices, but it has additional benefits across all aspects of the AP cycle.
Invoices can be received in a variety of ways: email, mail, downloading utility bills, and my personal favourite anecdote: fax! Adopting an AP automation platform streamlines this process and helps keep vendors compliant.
It also eliminates the need for paper at all! The platform can digitally centralize invoice records and contribute to a paperless office. Related to our next points on Approvals and Paying Invoices, we see a lot of time and money spent on moving (mail/courier/ transporting) paper invoices and cheques that can be eliminated.
For the only CondoWorks-specific mention here (the author is one of the co-founders): our most popular feature is the ability to automatically download all types of utility invoices. This can save a ton of time by eliminating the need to handle mailed invoices or having to log-in to different utilities and download invoices.
It’s important that all invoices are properly approved and that there is a sufficient record of that approval.
With an AP automation platform, approvals can be enforced by the system, different rules and workflows created (e.g. invoices above management’s spending authority limit need extra approval or invoices processed by limited licensees which are over $500 need extra approval), and a verifiable audit trail is easily created.
As an added benefit in this COVID-era, for those managers who work mostly on-site away from head office, or any of us who enjoy heading south in the winter, approvals can be done electronically from anywhere!
As a CPA, I have done my fair share of bookkeeping. For me, the most tedious aspect of my past roles has been entering invoice data into the accounting system.
An AP automation platform can eliminate the vast majority of manual data entry, and does so with a much higher degree of accuracy! This can be accomplished by features such as invoice data extraction, and automatic synchronization to the accounting system.
This may sound blasphemous or scary to some, but paying invoices by hand-signed cheques is the most inefficient and least secure method!
With an AP automation platform, you can typically still pay via cheque, but you also have the ability to pay vendors faster and more securely through electronic payment methods such as EFT (direct deposit).
Returning to the stats mentioned at the beginning of this article, a fully automated AP process can reduce the AP cycle from 45 days to 5 days, and the full cost of paying an invoice from $15 to under $3.
This benefits all stakeholders: owners, boards, managers and vendors.
For more information on the services CondoWorks provides, reach out to Braedon here:
Braedon Hebert CPA
t. (647) 268-3234
Braedon Hebert, CPA is co-founder of CondoWorks, an accounts payable automation platform. After over a decade of working for startup and technology companies in Toronto, he recently moved back to his hometown of London with his wife and three kids.
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