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How can AP automation help your small business? (What problems does AP automation solve)

Are you a small business owner? Are you tired of managing your business processes manually? No need to worry anymore. Now you can simplify them, organize them and make them more efficient with the help of AP automation tools. These tools also help you accurately measure your business’s performance.

Studies suggest that small businesses are affected most by the slow and manual payment processes. That is because they generally depend on cash which requires approval from the upper hierarchy to make payments in a timely fashion.

The process of approving invoices, paying bills, and tracking expenses can be a time-consuming and tedious task in small business accounting. Often, companies will outsource this entire process to an outside agency, requiring a designated employee within the company to approve all invoices. This system of controls tends to add many steps and delay the payment of legitimate bills, creating excess overhead and endangering cash flow.

This is where AP automation comes in.

Many small businesses are unaware of the benefits of automating their accounting processes. In this article, we will discuss ten problems that can be solved by using AP automation tools:

Help your business grow

Small business owners have a lot to juggle. They have to keep their employees happy, their customers happy, and their finances in check — all while keeping up with the latest trends and technologies in their industry.

To help your company grow, you need to invest in the right software. That’s why automated processes (AP) are valuable to your business: they free up time and resources that can be better used elsewhere. Automating your accounting processes can help you grow your business by optimizing the processes.

  • It will speed up payments, reducing the time it takes to process invoices and payments. This helps your business expand faster by freeing up cash for new projects, investments, hiring, and other initiatives that increase profits.
  • It will reduce the manual work involved in processing invoices and payments, allowing you to focus on more important things like growing your sales pipeline or getting more customers through the door.

That said, small businesses that don’t use these tools are at a major disadvantage regarding productivity, profitability, and scalability. The solutions and tools exist; the real challenge is finding the ones that are right for you, your business, and your goals.

Win over the CFO (Chief Financial Officer)

In the end, you need to win over the CFO.

Your CFOs are concerned with costs and ROI (Return on Investment). What does that mean for you? You need to show how automation will help reduce costs and increase productivity. Then, you can prove that no additional costs are involved in automating some parts of your business.

Finally, as mentioned above, compliance is another important factor in automation. For your company’s financial reports to be accurate and legitimate, they need to comply with industry regulations like GAAP (Generally Accepted Accounting Principles).

Automate time-consuming tasks

Let’s see how you can automate these tasks:

  • Automate repetitive, time-consuming tasks. You can use automation software to turn manual processes into automated ones. For example, suppose your firm handles a large number of invoices. In that case, you can set up an automated workflow that automatically sends out invoices to clients after the accountant or manager approves them. The software will then take care of automatic payment processing and reconciliation. This saves a lot of time and effort from your staff members who could be using their time for more important things like generating new revenue streams instead!
  • Automate manual data entry. If some fields in your system require lots of data entry, why not let the computer do it? Several features are available in modern business management systems (iBMS) that allow users to enter information once only while ensuring that all other relevant fields get updated automatically too!

Reduce costs

Cost reduction is one of the most obvious benefits of AP automation. For example, you save on costs related to data entry. This includes the cost of hiring an employee to do manual data entry (or outsourcing it), as well as all associated expenses: recruitment and training, health insurance and other benefits, office space etc.

The same goes for manual processing—with AP automation you save time processing invoices by hand. This frees up employees for other tasks or lets them work fewer hours per week (if you opt for a part-time workforce). It also means fewer opportunities for human error or mistakes in general. You can also expect greater accuracy in calculations since automated systems are usually more reliable than their human counterparts!

In addition to this direct cost savings from reduced time spent on manual processes and lower error rates comes indirect savings through increased productivity caused by less wasted effort on repetitive tasks like data entry instead of focusing on higher value activities such as strategic planning or sales calls etc., which take place outside normal working hours anyway.

Increases Supply Chain Transparency

As a business owner, you understand how important it is to have a transparent supply chain. It saves you time, money, and effort. This is why you need automation software that can help you track and trace your inventory. AP automation does this for you.

With AP automation, you can get real-time insights on the following:

  • How much money is coming in at any time
  • How much money is being spent at any time
  • Where your money is going

Real-time insights into your business

This is the most obvious benefit of AP automation. With data available in real time, you’ll be able to make any decision and get immediate results. You won’t have to wait for someone else (like a manager) or your accounting software to provide information on how things are going for you to make decisions – this will allow you to react quickly and efficiently.

The data collected by automated processes can help managers measure progress towards goals, identify areas where improvements need to be made, and keep track of how each employee is performing compared with their peers and other departments within the company as a whole; all without having to wait until month end or another scheduled report date!

Low-Cost Data Storage

A small business can have a large amount of data. And while on-premise storage is cheaper, it comes with its own problems. Cloud storage is more secure and convenient than traditional on-premise storage solutions, making it ideal for small businesses who want to free up time in their day or reduce costs.

Simplify processing of invoices

There are two main areas where invoice automation can help:

  • Automating the process of invoice processing. With this, you’ll save time and effort by eliminating manual steps like entering data into an Excel spreadsheet or emailing invoices to clients. Instead, you can give yourself more time to focus on other important tasks—like growing your business!
  • Automating the process of invoice generation. This is especially useful if you have a large client base or many orders each week. For example, imagine having 500 invoices that need to be generated at once—and all those invoices go through different departments before they reach their final destination (e.g., accounting). That’s a lot of work!

Increase AP productivity

AP automation can help you achieve these goals by improving the productivity of your AP staff. Automation can eliminate manual data entry, which saves time and improves accuracy. It also helps speed up the process for entering transactions, which in turn will reduce risk of fraud and error. Automation can also help improve compliance with policies and regulations such as PCI, SOX or GLBA.

Improve accuracy and efficiency of AP process

Automating the AP process will help you achieve these results:

  • Improved accuracy. This means that you don’t need to worry about errors and mistakes regarding invoices and payments. Your team can focus on other important tasks, like increasing sales or creating new products.
  • Reduced manual intervention. When you automate the invoice processing, you will no longer have to manually check each invoice for errors or inconsistencies before approving it for payment—the software does this work for you! It also helps prevent any issues with payments being late or disputed because all transactions are processed immediately.

Reduce the risk of fraud and error, improve compliance

The first problem that AP automation helps to solve is reducing the risk of fraud and error. When you’re using a manual system, you’re relying on employees to enter data accurately into your accounting software. If they make a mistake or are dishonest, there’s nothing to stop them from entering incorrect information into the system. This can result in serious financial problems for your business in the form of fines or even criminal prosecution if it’s severe enough.

With AP automation tools, you’ll never have to worry about this happening again because every single transaction is automated and approved before being recorded into your accounting software automatically!

Automate manual data entry to improve processing speed

Automating manual data entry can help improve processing speed. This is because it takes less time to complete the same task, and there are fewer errors in the process. It also reduces costs by reducing the need for manual labor, which can be costly.

A good example of this is when you have to enter a single piece of information across multiple systems manually, over and over again: it takes longer with each entry, there are more opportunities for errors due to human error (such as typos), and it’s expensive because you’re paying someone else to do something that could easily be automated.

AP automation can help solve common problems in Accounts Payables

AP automation can help solve common problems in Accounts Payables, including:

  • Manual processing of AP invoices
  • Reconciling AP invoices with the receiving reports
  • Assigning incorrect bills to the correct accounts
  • Missing invoices and payments
  • Duplicate or multiple payments for one invoice
  • Paying off-cycle bills without disrupting other scheduled payments
  • Incomplete or inaccurate data in your AP system
  • Late payments and penalties for non-compliance with payment terms
  • Duplicate receipts for one invoice and payment


We hope that we’ve given you a better idea of what AP automation is and why it could be useful for your business. We know that it’s not always easy to invest in new technology. Still, if you’re struggling with some of the problems we listed above and want to find something that will improve productivity—AP automation might the solution you need!

January 10, 2023