Accounts Payable Automation Software

Our AP Automation software makes data input & invoice filing easy, freeing your team up to work on more important tasks.

Automating Your Accounts Payable Process

It streamlines. It simplifies. It saves. That’s accounts payable (AP) automation, and it’s becoming a must-have asset for companies across the world. Why? It offers your team more control and visibility into your accounts payable processes, which provides your business with a number of benefits, like the end of data entry, filing, and manual approval routing. With its numerous advantages, it’s worth learning about what AP automation is, how it works, and where you can apply it in your company’s day-to-day operations.

What Is AP Automation?

What Is AP Automation

AP Automation is the process of automating accounts payable processes—including receiving invoices, processing payments, noting discrepancies, and getting approvals from responsible parties.

In business, there are always challenges to combat and AP automation helps remedy some of those issues, which can include:

  • Manual data entry
  • Missing invoices
  • Manual invoice routing
  • Slow approval times
  • Low liability visibility
  • High processing errors

One of the most substantial drawbacks in accounts payable is the time it takes to review, process, and approve invoices for payment, which is exacerbated by the fact that invoices are often decentralized and accounting departments are frequently coping with a high number of discrepancies and exceptions. So what is AP automation? A trusted solution to the troubles of manual accounts payable operations.

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How Does AP Automation Work?

As a simple, smart and seamless solution, AP automation is easy to follow and starts with the following steps:

Receive invoice

When your invoices arrive, you can input them into your AP automation solution one of two ways—by scanning them in-house or outsourcing the process. If you decide to have your invoices sent to a third party, like MHC, you’ll have a solution you can trust. We offer a turnaround time of one business day, as well as 97 percent accuracy. We return the information to you via file transfer protocol (FTP).

Submit invoice for data extraction

Whether you take care of reviewing your invoices in-house or send them to us, you’ll need to submit each for optical character recognition (OCR) in your AP automation solution. OCR will turn your picture into text as well as pull specific information that it’ll input into your accounting program, like the due date, amount, invoice number, account number, and more.

Route invoice per business rules

After extracting the data, your AP automation system will route the expenses to the appropriate party based on whether it’s a purchase order or invoice. The system makes this differentiation in accordance with your established business rules, which you can modify as your processes change. You can also create new ones.

Next, your automation solution will complete one of the following, based on the chosen route:

Purchase Order Matching

After you receive the order and invoice from your supplier, the date from each will be checked and you will receive an alert—based on your specific needs and requirements—alerting you that a manual review is called for.

Expense Approval

 If the invoice registers as an expense, the system will send it to the designated party responsible for that charge. That person can look over the invoice by logging into their email or the program, which makes it convenient for busy schedules. After they’ve approved it, the system automatically uploads it to your accounting application for voucher generation. Your accounting team can then decide what expenses will go into your next check run.

Whether it’s an expense or purchase, your AP automation solution will then take care of the GL distribution. In this step, the system applies one or multiple codes to each invoice, which gives your team insight into what type of expense is coming out of your budget, such as a sales, marketing, or supply chain. In the long-term, that can alert your accounting department to rising costs that could be managed better in the future.

The Benefits of Using MHC’s
AP Automation Solution

On top of providing you with the best accounts payable software for managing your workflow, MHC remains committed to our emphasis on security. We illustrate by providing high-level security compliance with our software systems. Some of the automated accounts payable solutions MHC’ software offers include:

1.

Pure “bolt-on” solution design to enhance your existing business applications

2.

Elimination of paper at the source,making information instantaneously available

3.

Complete process oversight in a single view

4.

Elimination of data entry, filing, and retrieval

5.

Automated PO matching

6.

Straight through process based on your business rules

7.

Quickly and easily edit GL distribution

8.

Capture early pay discounts

9.

Maximize productivity and save money

Your Two AP Processing Options

When you work with different vendors, whether you’re in the manufacturing, hospitality or any other type of industry, you have to keep your invoices in order. When these records become disorganized, you may miss deadlines, lose relationships with important vendors, or experience other trouble. At MHC, we offer two unique automated accounts payable systems to improve your business operations and AP department. Whether you prefer a more traditional invoice collection style or an automated system that relies primarily on technology, one of our two AP processing options is sure to work great for your business.

1. Invoice Capture and Data Extraction System

Your first option is the invoice capture and data extraction system. With this option, everything is digital. The invoice automation process occurs in two stages, invoice capture and data extraction. In the first stage, vendors can submit their invoices either digitally or through the mail. After the physical invoices come in, they are batch-scanned in order to keep all invoices in one place. If you opt for completely digital invoicing, you choose a more streamlined system too. Digital invoices can be entered into the system in various ways, including:

Outlook integration imports PDF invoice attachments from monitored email inboxes.

Auto import from
a mapped directory.

Drag and drop
ingestion.

During the second stage of data extraction, the software will process each invoice to identify the vendor and, depending on the processing rules, will pull in header data for expense vendors. Purchase order vendor invoices will be processed for both header and line item details. The system extracts the following details:

Header data — Date, PO number, invoice number, freight, tax (GST/VAT), discount and total

Line item detail — Part number, quantity, description, unit cost and extended amount

After the extraction, all of the information that you need is organized so you can find the specific information that you need faster.

2. Payables Lockbox System

Our second option is an accounts payables lockbox system. With our partner ScanTek, you receive a PO box where your vendors will submit all invoices and email invoices will be directed there as well. ScanTek will input the information to double key each invoice for any discrepancies or other issues. You receive a notification if any issues come up for your review. 

Once processed, the data and images are returned to you. Whichever option that you choose, our systems will help improve efficiencies and day-to-day operations within your business. By receiving all of your invoices in person, it’s up to you and your staff to monitor the information for accuracy and to ensure each invoice is paid on time. All of those paper invoices can really pile up throughout the year and require a great deal of time to scan in yourself.

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AP Invoice Automation Solution Overview

Accounts Payable Workflow Automation

No matter which of the two methods you choose for your invoices, each invoice image will become a workflow task. Transactional data will be queried from your ERP or accounting application, populating the task with information from the vendor master file, purchasing/receiving and chart of accounts. The supporting documentation — including the invoice, receiving documentation, contracts, user documents and any other relevant information — will be collected and become easily accessible in the task view. Based on what each invoice indicates, the system will process it appropriately:

Purchase Order Invoices

These invoices will be matched against purchasing and receiving data. Matching invoices will be processed straight through, while those with variances will be flagged and routed to be corrected.

Non-PO
Invoices

The system can route these through standard approval processes, with multi-level approval based on dollar amount and vendor. Email and browser-based payment approvals will be offered as standard features.

Approved Invoices

These invoices will be processed through to the end. Then the system will upload transactional data to the ERP/Accounting Application and create the vouchers.

How Does AP Automation Differ From Manual AP?

To see the difference of AP automation, think about the traditional step-by-step process of accounts payable:

  • Receive, scan, and upload invoice
  • Input invoice data into the system and route for approval
  • Review and approve invoice data
  • Record approval and post update to the system
  • Assign GL coding and key ACH batch
  • Print checks or ACH batch
  • Review checks or batches and authorize the release of payment
  • Sign and scan checks
  • Send payment

In comparison, AP automation workflow software follows a series of automated steps after you upload your invoices. It’s quick and helps you:

  • Improve accuracy
  • Reduce time-consuming tasks
  • Lower labor expenses
  • Obtain vendor discounts
  • Limit document losses

As a result, AP automation is becoming a standard for companies worldwide, especially as many businesses move toward digitizing their operations.

How Can You Use AP Automation?

No matter your market, you can use AP automation — look at the following case studies as examples:

Chesapeake Energy Corporation

Before automating their accounts payable, Chesapeake Energy Corporation relied almost entirely on paper and manual work. With an increase in receiving and processing paper invoices, they were in need of a business process improvement. That’s when they contacted MHC. Using our expertise, they successfully implemented an AP automation system, including AP invoice approval and payment process, that started saving them both time and money almost immediately. Today, they can process a five-fold increase in invoices with less personnel, and savings accrue at each and every step of the system.

Quickfire Restaurants

The challenge for Quickfire Restaurants was time. It didn’t make sense to spend several hours a week processing, approving, printing, and sending checks for 90 invoices. That’s when the Texas company turned its attention toward AP automation. After incorporating it into their business, those hours dwindled to 30 minutes a week, letting staff maximize their time.

Why Choose MHC?

Data entry for invoicing is a task that may not be worth assigning to your own staff. Between the time that it takes to complete it, the frequency of it and the potential for human error, let MHC take care of it for you! Our complete accounts payable automation solution lets your employees get back to doing what’s more important.

The software is smart—utilizing robotic process automation, it identifies all of the important information and sends notifications of bills that need to be paid. Even when you receive an invoice that was already paid, the invoicing software knows the difference and has the capabilities to do exactly what you need it to do. Our automated software does the work so you don’t have to. With a variety of capabilities and connection to other systems, adopting either option makes your business run much more smoothly. 

The transactional data is identified, recorded and organized in a way that makes the most sense to you. You can access everything you need in one simple place, and you won’t have to deal with those disorganized paper invoices again. Request a free demo to learn why you should choose MHC as your accounts payable automation vendor.

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