There’s cut-throat competition in the retail industry, and retailers are required to be quick and do agile business. They need to respond to new product trends at breakneck speed, ensuring they meet consumer demands at all times while delivering an excellent service.
With so much competition in the market, retailers must keep processes lean in order to deliver to customers and stay ahead of their competitors. While retailers place great emphasis on improving front-end processes that impact customer experience and are critical to their success. They should also pay attention to back-end processes, particularly in accounts payable (AP) and procurement.
The retail industry is highly dependent on complex vendor networks. The demands are dynamic, and there’s an immediacy in the way they need to be met. The high volume of invoices that retail companies’ AP departments process can be quite intimidating.
In many retail companies, accounts payable still runs on paper, and having to manage it all is inherently inefficient. Conventional methods of managing the accounts payable process result in high costs, long processing times, and slow supply chains. There’s also the risk of losing important invoices or failing to make payments on time. This can kill the productivity of a retail business and sour relationships with suppliers. And an unexpected audit could create a logistical nightmare for an overworked accounts payable team.
Invoice automation is the perfect solution to all these problems. Therefore, it’s important for a retail company to have comprehensive and robust AP automation software to manage and streamline its voluminous account payable process.
Reasons Why AP Automation is Must for Retail Companies
Complex Process
Retail companies deal with countless vendors having diverse business portfolios, so they need a specialized system that can manage complicated accounts and accelerate the workflow.
Shorter Processing Time
Companies with slow invoice processing times struggle to reduce costs within accounts payable. Level Research has shown that manual routing of invoices for approval is the biggest slowdown in the AP process. Remote working has further highlighted the inefficiency of the manual process. With employees working from home, approvals become difficult. However, companies that use automation have quicker approval times and improved visibility into unpaid invoices.
Process Blindspots
Accounts Payable automation increases visibility & transparency, and hence eliminates the process blindspots generally caused by the traditional paper-based process.
Reporting
In the fast-paced retail environment, accuracy is important for making informed decisions. The traditional method is time-consuming and error-prone, while automation simplifies report creation. And you can easily download system-generated customized reports from the AP software.
Vendor Management
AP automation simplifies vendor management. It also helps you avoid late payments. You get reminders of upcoming due dates, enabling you to make payments in time. Automating the AP process also helps you enjoy early payment discounts. Most vendors offer early-payment discounts when you settle invoices ahead of time. Having good customer service in accounts payable results in royal vendors. The vendors might even be willing to negotiate with your company and offer benefits like discounts or flexible payment terms. Automation will not only improve your relationship with vendors, but will also improve company credit ratings, and optimize the entire supply chain process.
Productivity & Efficiency
In a highly demanding retail industry, productivity is crucial. The manual AP process is time-consuming. However, with accounts payable automation, you get more work done in less time. The work that used to take hours to finish will get done in split seconds. This will leave the accounting team with more time, and they can focus on vital tasks, thus increasing productivity & efficiency.
Managing International Suppliers
Retailers having international suppliers face further challenges. Managing rapid fluctuations in exchange rates can be time-consuming, and can lead to over or underpayment. Dealing with multiple languages and invoicing requirements present further issues when relying on manual AP processes, and can result in problems ranging from processing errors to non-compliance.
Cost Saving
The manual accounts payable process is time-consuming, error-prone, and resource-intensive. While, initially, the organization will have to invest in AP automation software, it saves money in the long run.
Streamlining Audit & Compliance
Smooth audits are beneficial for companies. AP process is subject to multiple compliance and audit regulations. Monitoring compliance requirements manually is a cumbersome process. Accounts payable solution keeps a check on all the compliance requirements automatically and notifies the concerned parties in case of any discrepancies. The solution increases transparency & visibility and makes it easy for auditors to access all your records. Also, having records in an accessible digital format speeds up the audit process.
Prevents Frauds
With accounts payable workflow software, overpayment, and duplicate payments become a thing of the past. In 2020, the AFP Payments Fraud and Control Survey suggested that – About 81% of companies were targeted for payment fraud in 2019. Fortunately, AP automation software protects your business against fraud by ensuring no single employee is responsible for payment approval.
