Since accounts payable (AP) management involves the company’s financial obligations to its vendors and suppliers, it is a crucial process for businesses of all sizes.
Traditionally, managing AP has been a time-consuming and complex process, involving:
- lots of paperwork,
- manual data entry, and
- frequent communication with vendors for clarifications and confirmations.
However, in recent years technology has begun facilitating a significant trend towards AP automation, which streamlines the process and makes it more efficient.
The key advantages of cloud computing
The use of the term “Cloud Computing” comprises different modes of delivery.
The most widespread of these are IaaS (Infrastructure-as-a-Service), PaaS (Platform-as-a-Service) and Saas (Software-as-a-Service).
Each of these has different characteristics, but every use of the cloud at the corporate level offers distinct advantages:
- Accessibility: Access your data and applications from anywhere and from any device.
- Cost savings: Use the latest, powerful tools without needing to make substantial initial investments.
- Automatic updates: Enjoy applications and infrastructure that are always up to date.
- Security: Gain peace of mind from data duplication and advanced security measures.
- Monitoring: Achieve more control with continuous tracking and supervision of applications.
- Integration: Reduce technical headaches thanks to the plug-and-play interoperability of digital services.
These benefits help simplify business management and improve efficiency.
Software as a Service (SaaS) cloud
The SaaS model allows direct customer use of software and services offered by a service provider. Its special feature is the cost, which is distributed according to the use you make of it.
By accessing your chosen software via a SaaS model, you free yourself to concentrate exclusively on how best to use that software to the best advantage of your business. The SaaS provider is responsible for providing, maintaining, and updating the software, and the underlying infrastructure, and for the security aspects such as controlled access, and data backups (they are not responsible for human error by users though – such as weak passwords or poor password safety).
The main advantage of the SaaS distribution model is precisely this ability to access and use software that would be too expensive if maintained in-house.
Specific SaaS benefits
By offloading the responsibility and costs onto the supplier, you can focus on those aspects of your business that generate most revenue.
Running your business without the necessity of maintaining software will boost your bottomline by reducing costs, increasing efficiency, and optimizing the use of resources.
Other benefits of SaaS services are to:
- Reduce initial development costs
- Access the software from anywhere at any time
- Customize the services according to your needs
- Modify the interface as required
- Increase collaboration through increased access control – even remotely
- Integrate with other software
- Generate customized reports
- Scalability of SaaS
Cloud-based SaaS applications can grow with your company because adding access to the service or application is much easier. Likewise, if business activity decreases, you can cut back on use and benefit from the costs adjusting to active usage.
SaaS tools have improved the lives of people in countless businesses, from founders and executives to the finance teams and support staff.
The advantages of using an automated, cloud-based solution
Specific cloud-based software solutions are also enabling the automation of the entire AP process. These solutions easily integrate with your existing accounting software and can automatically import data from invoices, receipts, and other financial documents eliminating the need for manual data entry, reducing the risk of errors, and freeing up staff time for more strategic tasks.
Another trend is the application of artificial intelligence (AI) and machine learning (ML) to improve AP management.
These technologies can analyze data from invoices, credit notes, receipts, purchase orders, delivery notes, and so on, identifying patterns and anomalies that might indicate errors, fraudulent operations or even opportunities for savings or consolidation. They also offer predictive analytics to forecast future expenses based on past patterns to help CFOs better manage cash flows and make more accurate projections.