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Automating Accounts Payable: Reducing Costs Associated With Paying Bills B Y DAVID L . EVANS , CPA, ALLOY, SI LVE RSTE I N, SHAPI RO, A DA M S , M U L FO R D, C I C A L E S E , W I L S O N & C O.

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ne of the least favorite and most costly steps of the accounting cycle is accounts payable processing. How much does it really cost to pay your bills? Studies claim that it can cost anywhere between $5 and $20 to pay a single invoice. Considering the entire cycle of manual bill paying, as described below, there can be 12 or more steps involved, depending on your organization. 1. Receive order with packing slip. 2. Check in order and compare to packing slip. 3. Compare packing slip to purchase order. 4. Attach packing slip to purchase order and file. 5. Receive invoice. 6. Compare invoice to packing slip/ purchase order. 7. Approve invoice. 8. File invoice with packing slip/ purchase order in unpaid invoices tickler. 9. Process invoice for payment; write check.

10. Attach check to invoice, packing slip/purchase order for signature. 11. Sign check. 12. Mail check with any pertinent documentation. This arduous process has always frustrated business owners because of the labor and resources required. Automation of the accounts payable process can save time and money — and increase accuracy. Automation is also a sustainable, environmentally friendly process because of the reduction in the amount of paper used. Saving time, company resources and natural resources are some of the benefits of accounts payable automation. Paper-oriented business processes are inefficient. Without automation, accounts payable departments are riddled with paperwork, frequently resulting in wasted time filing, copying, mailing or just looking for documents that may have been misplaced or lost. According to Jeanette Martin, an expert in process N E W J E R S E Y C P A • M AY • J U N E 2 0 1 6

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automation, using a manual system can more than double the cost of invoice processing. Also to be considered are the indirect costs associated with manual systems. Automation involves a substantial reduction of paper, which has the practical benefit of saving space. Depending on the size of the company, accounts payable information can involve drawers, filing cabinets or even rooms full of papers to be stored, both on-site and off-site. That space comes with costs, including rent, heating and air conditioning, security and human resources. Automated accounts payable information storage is done digitally, by way of various automated storage devices or, even more optimally, in the cloud. Cloud storage is efficient and easily accessible. Finding a digital document can take seconds as opposed to the possible hours involved in retrieving paper documents. Another benefit of

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TECHNOLOGY * Controlling Access to Data * Office 365: The Staple of the Business Cloud? * Mitigating Cyber Risk * Cloud Computing: Security...

May/June 2016  

TECHNOLOGY * Controlling Access to Data * Office 365: The Staple of the Business Cloud? * Mitigating Cyber Risk * Cloud Computing: Security...

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