Is AP Automation in Manufacturing Really Effective?

While improving efficiency, productivity and operations are key areas of focus in any manufacturing plant, few technologies are better than automation at achieving company goals. AP automation helps manufacturing businesses access important financial information, identify competitive advantages, and lower costs across the board.

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Benefits of AP Automation in Manufacturing

Accounts payable (AP) automation software provides managers with powerful tools for evaluating, operating and maintaining their business. Simplifying transactions for suppliers, automating invoices, and implementing time-saving software can help save money, but there are a number of other benefits to using AP automation software in your business.

Eliminate Manual Data Entry

Manually processing paper invoices can lead to entry errors, lost data, and invoice duplicates. AP automation allows employees the ability to capture data at high-speeds through web-based requisition forms, email scanning, or accounting software integration. Using AP automation solutions leads to less time and money being put towards inputting data and rectifying errors, which helps with the accuracy of information, and eliminating wasted resources.

Improve Invoice Approval Time

Accounts Payable personnel are responsible for ensuring that processed invoices are approved, recorded and paid on time. While this process is time-consuming and costly, since paper invoices must go through manual business processes, automation takes advantage of digital processes to streamline workflows. AP automation systems handle the routing, matching, approval and distribution of purchase orders and invoices.

Accurate Bookkeeping

AP automation software allows records to be automatically indexed, routed and processed to ensure that payment should be made. Digital systems will also match incoming invoices to their respective purchase orders and packing slips, so that accounts payable personnel don’t have to work on mundane tasks, and can instead focus on higher priority issues.

Integration and Compliance

As invoice data is captured, AP automation software can feed that information into an existing financial system. When the process is complete, the records are archived for future reference in full compliance with all IRS mandates. When these records are no longer needed, they are promptly queued for removal, as per proper record retention regulations.

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How Does Workflow Automation Work?

AP Automation enables manufacturing companies to process accounts payable information without any human intervention. It’s a system that provides a digital workflow process to manage tasks that are traditionally handled manually by an AP staff member.

Examples of AP automation in manufacturing include:

  • Capturing invoice data in digital format through scanning, capture method, or optical character recognition (OCR) software
  •  Coding and routing invoices with specific configurable logic
  •  Integrating with enterprise resource planning (ERP) systems to transfer data between IT resources
  •  Reducing fraud by giving management visibility and transparent reporting capabilities
  •  Optimize vendor portfolios, avoid duplicate or erroneous payments, and take advantage of early payment discounts

Manufacturing companies that implement AP automation solutions normally connect them to existing ERPs and other business applications in place. With cloud-based AP software, there are a variety of options available to suit manufacturing companies of all sizes and industries.

Depending on the type of supplier invoices and how they’re handled, AP automation systems can work differently. For indirect expenses, AP automation software will support automatic data capture, coding and distribution of the invoice to the appropriate approver.

When a purchase order is involved, or direct spend, the AP automation system will automatically match the invoice data to the purchase order. If everything is correct, the invoice will automatically be sent without any human intervention or approval.

What Are the Best Practices for AP Automation in the Manufacturing Industry?

While there are a variety of AP technologies available, not every manufacturing business requires the same solution. By incorporating the best practices, AP managers can avoid the difficulties of over-complicated systems, and capitalize on custom solutions.

Organizing Data and Content

Document automation software allows AP departments to scan documents and capture basic information without having to manually enter hard data. After the information is uploaded, data can then be organized by keywords, preconfigured dropdown lists, and parameters such as titles, PO numbers, or brief descriptions.

Digital AP Processing

AP departments can have vendors and suppliers submit invoices electronically, rather than receiving paper invoices or having to enter information manually. Since electronic files have better quality than scanned documents, the improvement in quality leads to fewer errors.

Intelligent Data Capture (IDC)

AP managers can review information by utilizing IDC scans data from document images. PO numbers, amounts or dates are digitally captured and populated in a variety of index fields, allowing for easy evaluation and identification. Uploading barcodes into the system can also capture important data, and reveal a more extensive set of parameters.

It should be noted that incorporating AP automation is not an overnight process. If you’re implementing any new technology or process into your manufacturing business, it’s important to consider how much change your employees can endure.

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DRS Imaging AP Automation Systems for Your Manufacturing Business

If your manufacturing business uses AP automation software, your managers will be able to organize and evaluate important data, improve communication throughout all levels of the organization, and better support the company goals.

DRS Imaging provides a complete line of outsourcing services, such as Document Scanning, Document Imaging, Document Management Software, ECM Software, SaaS Cloud ECM, Electronic Forms, Data Capture, Facilities management, equipment maintenance, and Microfilm services. DRS also provides turnkey document management systems, document scanners, and OCR & ICR capture platforms.

At DRS Imaging, all solutions deployed by our team of experts have impressive returns on investment. Industrial manufacturers are building custom AP automation systems, with value placed on lower costs, streamlining operations, and eliminating manual errors. Let us help you improve your manufacturing business. Call us today and speak with one of our experts.


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