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SME Guide to Accounts Payable Automation

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedDec 20222 min read

Accounts payable automation isn’t just for the big players. It’s a tool that’s widely available for companies of all sizes to help streamline accounting practices and make invoice processing simpler and more efficient. By digitalising accounts payable procedures, small business owners can gain time back and focus on other important aspects of their business.

In this post, we’ll discuss why all businesses should be turning to accounts payable automation tools to help them elevate their accounts payable workflows.

What is small business accounting automation?

Accounts payable automation is software that streamlines and automates the accounts payable (AP) process. It can simplify the processing of supplier invoices and create digital workflows that can manage all the steps in the accounts payable process.

By using small businessaccounts payable automation, invoices can be processed without any human intervention using digital scanning methods, for example OCR (optical character recognition). AP automation can also be integrated into a company’s existing ERP (Enterprise Resource Planning) system to provide clear reporting and visibility capabilities across company transactions.

Accounts payable automation: benefits for small businesses

Small business accounting automation can help to improve cash flow and streamline accounts receivable workflows. Some of the chief benefits include:

Time savings: An AP solution provides small businesses with the ability to automate manual processes.
Reduced late fees: Using a digital accounts payable solution ensures that bills get paid on time, thereby avoiding late fees.
Real-time insights: Accounts payable software can deliver real-time insights to help companies make better, more informed decisions.
Cloud based software: With bills stored on remote servers in the cloud, it’s possible to access them from anywhere at any time. Some accounts payable vendors also provide customers with mobile apps to make access even more convenient.
Reduced manual errors: By automating the accounts payable and receivable processes, there’s far less margin for errors or duplication of records.
Fraud prevention: Software can help to flag up suspicious activity more quickly. By using proactive data monitoring and analysis, it’s far easier to prevent billing fraud.

Best accounts payable automation tools

Xero and Zuora are examples of robust accounts payable automation tools designed to help small to medium sized businesses streamline their accounts payable processes.

With Xero, invoices are scanned and verified as part of a touchless invoice workflow, and accounts payable data can be quickly collected and reconciled too. It’s easy to see all invoices and accounts online in one place using the Xero app, and Xero can be connected not just to existing bank accounts, but to other payment processing providers, like GoCardless, for an up-to-date snapshot of the business’s cash flow.

What to look for in small business AP automation

It makes sense to choose AP tools that can be used in conjunction with other software. By integrating your AP software with a payment processing provider like GoCardless. it becomes even easier to collect payment from your customers’ bank accounts via direct debit.

Bank debit is a highly preferred method of payment for many invoice payers, outranking manual bank transfers and card payments. Once set up, payments can be taken automatically, eliminating the risk of late payments.

Why choose AP automation software for small businesses

When it comes to accounting, smaller businesses have to contend with a host of challenges, and maintaining a healthy cash flow is chief among them. Accounts payable automation can help smaller firms to capture and input invoices quickly and easily, while also reducing the time spent keying in data. This can lead to lower processing costs and help to keep the cash flowing.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.