Benefits of Accounts Payable Automation
Each business or organization usually has different channels through which it can access money for paying the day to day bills. When an organization sells goods n loan then this is known as accounts receivables or debtors. Accounts payables on the other hand are the debts that the business owes to outsiders.
Any business that wants to have liquidity, then it will have to ensure the deviation between the accounts payables and receivables are not too much. Accounting rule states that for a business to be said to be operating optimally then the payment period for the receivables must be shorter than that for the payables.
The manual way of tracking payables of a business is by filing all the receipts and other paperwork documents. For the big companies due to the bulkiness of the documents owing to the huge number of transactions, it might be hectic in having a clear record. It is for this reason that it is essential to automate the process of managing account payables.
When everything is computerized, then it is easy to know which invoices have been settled and which ones are pending. This in overall avoids confusion and maintains a healthy relationship between the business and the suppliers.
An advantage is in the time in which it takes to retrieve a record that you need. Going the manual of single handedly sifting through a lot of paperwork can take you a long time. Data retrieval of various payables records is much more efficient, you just tap one button and you have it all.
This in effect makes the company more efficient since less time is wasted. Another merit comes about because of savings in storage costs if paperwork was to be used.
With an accounting payables software, real time data, that is data as per a certain period can be gotten any time it is needed and it can be shared among different people in the company, for instance the account balances as per a particular period.
This is because the system automatically updates once a transaction is made and money deposited. There is greater visibility as far as the recording of transactions is concerned, you cannot manufacture your own figures and put them, in case of any discrepancies it will automatically show and corrective action will be taken, this helps in preventing fraud and misappropriation of funds.
An organization with an accounts payable software is able to take advantage of the early payment discounts that sown suppliers offer to heir clients. Sometimes if the organization does not have visibility on the life cycle of these debts then they end up missing out on such.