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How to automate AR/AP management for your business?

AR/AP management

In this guide, we are going to discuss how a business owner can simplify the process of AR/AP management by implementing automation at different levels of the AR/AP cycle. Before we start discussing how you can automate your accounts receivable and payable let’s discuss what is AP and AR. 

Accounts payable (AP) refers to the money that your business owes which might include online subscriptions, creditors, vendors, suppliers, and other miscellaneous expenses. On the contrary, accounts receivable (AR) is the money that your customers/clients owe you. When the businesses and customers or two businesses transact with each other on credit, the AR/AP record is created. 

Maintaining complete and transparent AR/AP records allow businesses to get clarity on how the finances of the business are being used. Getting this information recorded allows you to make informed financial decisions by gauging the inflow and outflow of funds. The challenge, however, comes when it comes to creating and maintaining AR/AP records. Thanks to AP/AR automation software like Paci Finance, you can now easily automate different processes involved in maintaining AR/AP cycle for your business. 

What is AR & AP Automation? 

Before we discuss how one can automate both AR and AP management involved in your business. Let us understand what it is.

What is AR automation? 

Itt is a process that involves using software or automated processes with the goal of automating account-receivable tasks which takes a lot of time. 

AR invoice automation. Irrespective of whether you are a supplier or vendor who sells business goods, raw materials, or products, invoicing is the most important part of this whole process. Thanks to the AR automation software, you can easily automate the AR system to generate, send, and record the invoices as a recurring process for your usual clients.

What is AP automation?

AP automation refers to the process of automating all the tasks involved in paying other businesses. With the help of AP automation software, you can easily automate the process of managing accounts payable invoices, expenses, reimbursements, and more. 

A simple example of accounts payable process automation is robust expense management. Instead of your team, working on creating expense reports at the end of every month, efficient accounts payable automation software can help you take care of itl. Not just this, a strong application allows your employees to scan and attach all the relevant expense receipts, reducing the overall time and effort involved in the process. 

 

 

List of accounts payable tasks you can automate

Below, we have the list of AP tasks that one can easily automate using one of the effective financial management software. 

Data entry 

A business usually have multiple vendors from where they get their stuff and goods. There is a huge possibility that not all vendors follow a proper process for sending invoices. Some of them might simply email, fax or send traditional paper invoices. Handling all these different forms of invoices can take a lot of time and effort which is reduced significantly with the help of AP automation software. 

Invoice matching 

Before the company makes any payment against the invoices, it is critically important that your finance team ensure that all the invoices are correct and there are no duplicates or wrong ones. This entire process of checking and verifying the invoices is quite time-consuming and complex which can involve a lot of work. 

Thanks to AP automation software, you can easily eliminate the invoice verification process as it notifies if there is any mismatch or duplication. 

Payment approvals 

Another major aspect of the accounts payable process is the payment approvals. In any business, there are many people involved – team leads, managers, founders, and finance departments, in the invoice approval process before the final payment is released. 

Without an effective software, all this is either done by email or via paperwork which takes a lot of time and will result in inaccurate payments. With the introduction of AP automation software, you get to take advantage of an online cloud-based invoice approval system reducing the time consumed in the process and streamlining the entire process. 

List of accounts receivable tasks you can automate

There are many different accounts receivable tasks that one can easily automate to improve the entire process. 

Creating and sending invoices 

The very first benefit of automating accounts receivable is – creating and sending invoices. If your business involves sending goods to businesses, having a streamlined invoicing system can help eliminate several problems. Recoginising this government across the world have adopted e-invoicing mandates.

The more time you take to send invoices, the longer it will take you to receive the payment which will disturb the entire financial process. AR automation software can be used to automate this entire process by generating and sending recurring invoices. 

Payment reminders 

Most businesses struggle with the issue of late payments usually because of late invoicing or missed invoicing. With the help of Accounts receivable automation software, you can set up reminders for all the invoices that you are supposed to send and even for the follow-ups on the invoices you have sent. 

Invoice reconciliation 

Automated invoice reconciliation for AR accounts is very important to understand whether the payment a debtor owes you matches your ledger or bank statement. With the help of automation software, you can keep a track of every account and payment. 

Bottom Line

In the end, we would like to say that every business today is taking advantage of financial management software to automate all financial business processes. Here, in this guide, we have discussed how AR/AP automating software like Paci Finance can help you save time and effort involved in different accounts payable and receivable tasks. 

A little about Paci Finance 

Paci Finance is an all-in-one financial management software that is designed to ease all the different finance processes of your business. Right from a streamlined and automated invoicing system, billing software, and connected banking to AR/AP cycle management, with Paci Finance you can take care of it all. 

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