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Workflow Automation

DEFINITION

What is Workflow Automation?

Workflow automation involves using rules-based tools and technology to create automated workflows that can operate with few or no human touch points. The purpose of workflow automation tools is to save time and money, reduce the risk of human error, and boost efficiency by eliminating many of the manual tasks that businesses have relied on in the recent past. Both employees and vendors can benefit from workflow automation via better communication and quicker turnaround times for invoice processing.

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Invoice automation software that allows you to process more invoices with fewer human touchpoints and less time managing exceptions.

What Does an Accounts Payable Workflow Look Like?

While the specifics of a workflow will vary depending on the industry and specific policies of your organization, there are some steps in the AP workflow that will carry over across most businesses. The five key steps of processing an AP invoice include:

1. Receive the invoice

Invoices can arrive in your AP system in a wide range of formats, including email attachments, electronic document formats such as Word, PDFs, and Excel sheets,  scans of paper documents, and faxes. Your system needs to be capable of processing these invoices no matter the format. Workflow automation software allows you to access all kinds of invoices from a single dashboard.

2. Capture the invoice

Once the invoice is received, the relevant data must be entered into your system. With a manual workflow, that requires time-consuming manual data entry with a strong chance of human errors. An AP automation software solution including optical character recognition (OCR) can automatically capture important data from invoices of all kinds and seamlessly enter that info into your system.

3. Verify the invoice

With all relevant data entered into your system, the next step is to verify that the information is accurate and verifiable. This requires comparing data from each invoice against corresponding data from purchase orders and receipts of goods and services. This can be a time-consuming and error-prone process if handled manually, but an automated invoicing system can perform automatic 3-way matching while flagging any errors or exceptions for further review.

4. Route the invoice for approval

Before an invoice can be paid, it needs to be approved by various stakeholders within your organization. In a manual system that can mean physically transporting documents between departments, a tedious and time-consuming process that can be slowed down further if a necessary approver is unavailable. Automating your workflow allows you to route those approvals automatically while sending notifications and reminders that make sure invoices get seen by the people who need to sign off on them. Drag and drop features make it even easier for approvers to enter a signature and get an invoice routed for payment.

5. Approve the invoice and make a payment

When all of the necessary approvals have been confirmed, the invoice is routed for payment. With an automatic software solution, all necessary signatures are verified in your system without the need for human touch points. That speeds up the payment process and ensures that your vendors receive payment in full when they expect it.

What are the Benefits of Workflow Automation for Your Business?

There are many ways that instituting more automated tasks can have an immediate and lasting impact on your day-to-day business processes. Automated software solutions can be tailored to match your specific business rules. The way your workflow management systems benefit from automation will vary depending on your industry and existing technology, but some of the more universal positives include:

Faster processing times

The simple fact is that doing things by hand almost always takes longer than relying on automated solutions. Repetitive tasks like manual data entry, manually routing invoices for approval, and matching data from invoices against purchase orders and receipts of goods and services eats up time that could be re-focused on more productive tasks.

The slowdowns that come with manual processing can have a ripple effect throughout your workflow as well, causing your organization to miss out on early payment discounts and incur penalties for late payments. Automating those processes can speed up the time it takes for an invoice to move from receipt to payment by a matter of days or even weeks.

More visibility

A manual system allows very little visibility into your invoice processing and other key workflow operations. Keeping track of paper documents as they move between departments is tedious, time-consuming, and difficult. That can be a recipe for missing or duplicate invoices, both of which often lead to confusion, late payments, and embarrassing conversations with your valued suppliers.

Automating your workflow not only provides easy visibility into every stage of the process, it also makes it much easier to detect and correct any errors that might occur. That also provides a clear audit trail so that either internal or external teams can track your process and identify what is working and what might be a problem that needs to be addressed.

Fewer manual processes

Even small mistakes can create big problems when it comes to your workflow. Manual processes such as data entry, routing documents for approval, and storing physical documents for future reference are invitations for lost documents, human errors, and even fraud. The more human touch points there are in a workflow, the greater the chances that something will slip through the cracks.

Automating as much of that workflow as possible reduces the time spent on manual tasks and greatly reduces the risk of errors. An automated system that includes cloud based storage options helps to eliminate the clutter of file cabinets and paper documents and eliminates the need to update cumbersome spreadsheets for each new invoice. The ultimate result is a more efficient and accurate workflow from beginning to end.

Easier approval process

Trying to approve invoices by hand is another needlessly difficult and cumbersome task. Physically routing documents back and forth between departments leaves too much room for error. In an AP department, that can lead to duplicate payments, underpayments, overpayments, and missing or incomplete invoices. All of those factors can hurt your organization’s reputation and result in costly delays.

Routing your approvals with an automated software solution ensures that every document gets in front of the people and departments who need to see it, when they need to see it. Routes can be configured to match your specific business process management, with approvers receiving automatic notifications when their signatures are needed. A system with a drag and drop interface even allows sign-offs with a quick swipe of the mouse.

Improved vendor relationships

Customer relationship management is a crucial consideration for any accounts payable team, since a big part of their role involves making sure that suppliers are paid on time and accurately. The risk of human errors, delays in payment, and inefficient processes that come with a manual AP system makes it a decidedly inferior method for optimizing customer relations.

An AP automation system not only eliminates many of those deficiencies but also allows for easier communication with your valued vendors. Being able to receive immediate feedback and offer easy visibility into your processes helps to put your suppliers’ minds at ease and assures them that their payments will be processed effectively every time.

Ready to learn more about the many ways automating your workflow with software solutions from MHC can revolutionize the way you do business? Contact us today to schedule a demonstration of our industry-leading automation solutions.

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Accounts Payable
Glossary

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Simplify the processing of invoices and payments while reducing costs, errors, and time-consuming tasks.

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