Resolving Accounts Payable Challenges Through Software Automation
DAYS PAYABLE OUTSTANDING BENCHMARK
Finance executives understand the liability of Accounts Payable (AP) in an organization. On the one hand, organizations need to ensure that their accounts payable practices remain efficient and safeguarded from business risks. On the other hand, organizations must pay their vendors in timely and cost-effective manner.
At the same time, organizations often face myriad of challenges when attempting to streamline their accounts payable processes. These include: manual invoice processing, dependence on paper documents, and discrepancies between obligations and payments. As result, days payable outstanding (DPO) measured as the time it takes to settle invoices lag behind the desired or benchmark target.
Software automation is one of the ways finance departments can mitigate this balance. Automation of AP processes: reduces labor costs associated with managing payables; eliminates manual double entry by eliminating duplicate entries and their revisions; ensures quick payments and reduced time-to-cash; eliminates paper documents and their manual delivery, storage and retrieval; and rapidly processes variety of payment methods.
The expected outcome of automated accounts payable processes is to bring down the organizations DPO Benchmark. In turn, this quickly translates into noticeable cash flow improvements, and more funds become available for other activities. Automation provides high visibility of the financial process and real-time analytics to better analyze and optimize payment streams.
The important point here is to ensure that software for accounts payable automation caters to the organizations changing needs, industry requirements and regulatory compliance. To ensure that the software is tailored according to their needs, finance executives can look for salient features and functionalities such as compatibility with newer versions of the software, customization capabilities and integrations with third-party applications.
Some other features finance executives need to pay close attention to while choosing the right accounts payable automation software include data security standards; availability of hosted server that supports the software; flexible pricing models that guarantee value for money; scalability of the software; access to technical support, and ease of use.
Accounts payable automation software can additionally empower organizations with unified financial platform that integrates single data repository with analytics, inventory and payment management, reducing complexities of different accounts into one transparent module. Organizations can leverage artificial intelligence and predictive analytics to look beyond financial numbers and uncover hidden opportunities to improve their operations.
On the whole, organizations that leverage specialized software for accounts payable automation can play key role in improving operational performance and mitigating DPO Benchmarks through improved cash flow management.
