What is AP Automation?

AP Automation (Accounts Payable Automation) automates invoice and payment processing workflows within an organization's accounts payable department. AP automation software helps streamline and digitize accounts payable processes, reducing manual tasks such as data entry, paperwork, and routing invoices for approvals, minimizing errors, and improving overall efficiency.

The software typically uses optical character recognition (OCR) technology to capture invoice data, then matches it to purchase orders and receipts to ensure accuracy before routing the invoice for approval. The automation process also allows for electronic payments to be made, reducing the need for manual checks and the time vendors take to receive payment.

AP automation helps organizations to optimize their cash flow management, improve financial visibility, reduce the risk of fraud, and enhance supplier relationships.

Why does a construction business need AP Automation Software?

A construction business can significantly benefit from the efficiencies provided with software for AP Automation for several reasons:

Streamlining Invoice Processing

With AP automation software, a construction business can streamline its invoice processing workflows and eliminate the need for manual data entry, paperwork, and routing invoices for approvals. This can save time and reduce errors, leading to a more efficient process.

Improved Accuracy

Construction projects involve multiple vendors, suppliers, and contractors, which can lead to a high volume of invoices. AP automation software uses OCR technology to capture data from invoices and match it with purchase orders and receipts, reducing the risk of errors and ensuring accuracy. 

Faster Payments

Construction businesses often have tight payment deadlines and must make payments quickly to avoid project delays. AP automation software allows for electronic payments, reducing the need for manual checks and speeding up the payment process.

Better Financial Visibility

AP automation software provides real-time data and insights into an organization's accounts payable processes, allowing for better financial visibility and management.

Reduced Fraud Risk

AP automation software can help to reduce the risk of fraud by providing greater visibility into payment processes, enabling more secure payment methods, and enforcing approval processes.

Overall, AP automation software can help a construction business to improve its financial processes, increase efficiency, and reduce the risk of errors and fraud. 

How do I evaluate and compare different AP automation software providers?

When evaluating and comparing different vendors, there are several factors to consider. Here are some key factors to keep in mind when looking at AP automation software:

Features and Functionality: Look for software providers offering features and functionality that meet your needs. This may include OCR technology, automated invoice matching, electronic payments, and reporting capabilities.

Integration with Existing Systems: Consider how well the AP automation software integrates with your existing financial and accounting systems. A provider offering seamless integration can reduce the time and effort required for implementation and ensure accurate data transfer.

Ease of Use: Choose a software provider that offers a user-friendly interface and intuitive workflows that are easy for your team to use. This can help to reduce the learning curve and improve adoption.

Customer Support: Look for providers that offer robust customer support, including responsive and knowledgeable support teams, online resources, and training programs. 

Pricing: Consider the pricing structure and whether it aligns with your budget and usage requirements. Some providers may charge a monthly fee or a fee per invoice, while others may offer a flat fee or a pay-per-use model.

Security and Compliance: Ensure the software provider follows industry-standard security protocols and complies with relevant regulations, such as GDPR, HIPAA, or SOC 2.

Reputation and User Reviews: Look for a software provider with a strong reputation in the market and positive user reviews. This can provide insight into the provider's reliability, customer service, and overall user experience.

By considering these factors, you can evaluate and compare different AP automation software providers to find the one that best meets your needs and budget.

What are some of the consequences of not using AP automation to run my construction business?

There can be several consequences of not usingAP automation to run a construction business:

Inefficiencies: Manual invoice processing is time-consuming and prone to errors, leading to inefficiencies and delays in payment processing. This can impact cash flow and vendor relationships. 

Increased Costs: Manual invoice processing can also result in higher costs due to the increased labor required to handle invoices and process payments.

Lack of Financial Visibility: Without AP automation software, it can be challenging to gain insights into the financial performance of the business, including cash flow, outstanding invoices, and payment status.

Risk of Fraud: Manual invoice processing increases the risk of fraud, such as double payments or payments to unauthorized vendors.

Missed Opportunities: A lack of automation can result in missed opportunities to capture early payment discounts or take advantage of other cost-saving measures.

Compliance Issues: Manual invoice processing can make it challenging to comply with regulations related to tax reporting and financial record-keeping.

Overall, not using AP automation can lead to inefficiencies, increased costs, a lack of financial visibility, increased risk of fraud, missed opportunities, and compliance issues. Implementing AP automation software can help mitigate these risks and improve a construction business's financial processes and performance.

What benefits does AP Automation software provide?

The amount of work and coordination required to get a construction project off the ground is often large and complex, to say the least. There are many different subcontractors and vendors involved in the project lifecycle. To ensure efficiency for your back office and accurate job costing, implementing a solution such as AP automation software can provide several benefits, including:

Increased Efficiency

A software tool can help to streamline invoice processing workflows, reducing the need for manual tasks such as data entry, paperwork, and routing invoices for approvals. This can lead to faster invoice processing times, more efficient payment processing, and reduced errors.

Improved Accuracy

AP automation software uses OCR technology to capture data from invoices and match it with purchase orders and receipts, ensuring greater accuracy and reducing the risk of manual errors.

Better Financial Visibility

When you implement an AP automation software solution, you’ll often get real-time data and insights into an organization's accounts payable processes, allowing for better financial visibility and management.

Faster Payments

With AP automation software, you can collect payments electronically, reducing the need for manual checks and speeding up the payment process. This can lead to improved cash flow management and stronger vendor relationships.

Reduced Fraud Risk

AP automation software can help to reduce the risk of fraud by providing greater visibility into payment processes, enabling more secure payment methods, and enforcing approval processes.

Cost Savings

By reducing manual tasks and streamlining workflows, AP automation software can help to reduce labor costs and increase operational efficiency, leading to cost savings for the organization.

Overall, AP automation software can help organizations to optimize their accounts payable processes, improve financial performance, reduce the risk of errors and fraud, and enhance vendor relationships.

How can contractors use Document Flow to manage AP Automation from anywhere?

Contractors can use HH2’s Document Flow to manage AP Automation from anywhere by following these steps:

Upload Invoices: Contractors can upload their invoices to Document Flow using a scanner or a mobile device. Once the invoices are uploaded, they can be processed automatically by AP automation software, reducing the need for manual data entry.

Verify Invoice Data: AP automation software can extract invoice data, including vendor information, invoice numbers, and amounts. Contractors can then verify the data to ensure accuracy.

Approve Invoices: Once the invoice data has been verified, contractors can approve the invoices for payment using Document Flow. The invoices can be approved from anywhere, using a desktop computer or a mobile device.

Schedule Payments: Contractors can use Document Flow to schedule payments for approved invoices. Payments can be made electronically, reducing the need for manual checks and reducing processing times. 

Track Payments: Document Flow allows contractors to track the status of payments and monitor payment history, providing greater visibility into accounts payable processes.

Manage Vendor Relationships: Contractors can use DocumentFlow to communicate with vendors and resolve any issues related to invoices or payments. The ability to manage vendor relationships remotely can help to strengthen these relationships and improve overall business operations.

Overall, using Document Flow to manage AP Automation can help contractors to streamline their accounts payable processes, reduce the risk of errors and fraud, and improve communication with vendors. Contractors can manage their accounts payable processes from anywhere, using a cloud-based document management system like Document Flow.

What’s next?

If you’re an AP Manager or another financial employee serious about streamlining your financial document management processes, then now is the time to invest in a full-scale software solution like Document Flow. From receipt to coding to approval and fulfillment, Document Flow helps to bring your entire document management process online, meaning you’ll spend less time doing paperwork and more time managing your project.