How To Leverage AP/AR Automation Tools For Enhanced Productivity In Your Accounting Firm

The future of accounting is knocking on our doorsteps, and it’s bringing powerful AP/AR automation tools along for the ride. 

These tools are changing the game for accounting firms worldwide, opening up new opportunities for efficiency and accuracy. 

If you’re an accounting firm owner, you know how tedious and time-consuming it can be to manage your accounts payable (AP) and accounts receivable (AR) processes. 

You know you have to deal with invoices, payments, reconciliations, and reporting, all while keeping your clients happy and your cash flow healthy. 

But what if there was a way to automate some of these tasks and save yourself hours of work every week? 

Well, there is! 

Buckle up, because in this blogpost we’ll explore the ins and outs of these tools, reveal why they’re the new must-haves for any accounting firm, and show how you can leverage them to streamline your accounting workflows and boost your productivity. 

Ready? Let’s dive in!

What are AP and AR automation and why are they important for accounting firms?

Just to make sure we’re on the same page here…

AP stands for accounts payable, which is the money that you owe to your suppliers or vendors for the goods or services they provide to you, and AR stands for accounts receivable, which is the money that your customers owe you for the goods or services you provide to them.

AP and AR automation are accounting software solutions that help you optimize your invoicing and payment processes, ensuring that you pay your bills on time and collect your payments faster. 

They also help you streamline your financial transactions with your customers and suppliers, reducing errors, improving cash flow, and enhancing relationships.

Since AP and AR represent two fundamental aspects of a company’s cash flow and financial management, automation in these areas then becomes about using technology to streamline, standardize, and simplify their processes. 

Imagine waving goodbye to manual data entry, and instead, welcoming software that handles invoices, payments, and receipts with speed and precision. 

That’s what AP/AR automation tools are bringing to the table!

Must Read – Top 10 AI Accounting Software in 2023

What are the benefits of AP and AR automation for accounting firms?

AP and AR automation can bring many benefits to your accounting firm, such as:

Reducing errors

Manual data entry can lead to mistakes such as duplicate invoices, incorrect amounts, or missing information. AP and AR automation can eliminate these errors by capturing and processing invoices electronically, matching them with purchase orders and sales orders, and validating them against predefined rules and exceptions.

Improving cash flow

Cash flow is the lifeblood of any business, especially for accounting firms that need to manage their own expenses and payroll. AP and AR automation can improve your cash flow by helping you pay your bills on time, avoiding late fees and penalties, and taking advantage of early payment discounts. 

They can also help you collect your payments faster by sending automated reminders to your customers, applying discounts or penalties for early or late payments, and reconciling payments with invoices.

Enhancing customer/supplier relationships

AP and AR automation can enhance your customer/supplier relationships by providing them with a better experience. You can offer them multiple payment options, such as credit cards, ACH, or PayPal. 

You can also send them customized invoices with your logo and branding, track their payment status, and communicate with them through email or chat. By paying your bills on time and collecting your payments faster, you can also build trust and loyalty with your customers and suppliers.

What are the features and functionalities of AP and AR automation software and how do they work?

AP and AR automation software have different features and functionalities depending on the vendor and the product. However, some of the common features include:

1. 1. Invoice capture: This feature allows you to capture invoices from various sources, such as email, fax, scan, or web portal. It also extracts the relevant data from the invoices using optical character recognition (OCR) or artificial intelligence (AI) technology.

2. 2. Invoice processing: This feature allows you to process invoices automatically by matching them with purchase orders or sales orders, routing them for approval or exception handling, coding them with the appropriate accounts or categories, and posting them to your accounting system.

3. 3. Payment processing: This feature allows you to process payments automatically by issuing checks, electronic funds transfers (EFTs), or wire transfers to your suppliers or vendors. It also allows you to receive payments from your customers through various methods, such as credit cards, ACH, or PayPal.

4. 4. Payment reconciliation: This feature allows you to reconcile payments with invoices by verifying that the correct amounts have been paid or received. It also allows you to update your accounting system with the payment information and generate reports on the payment status.
      
      
   5. Reporting and analytics: This feature allows you to generate reports and analytics on various aspects of your AP and AR processes, such as invoice volume, payment cycle time, cash flow forecast, aging reports.