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Manufacturers need AP automation because they often process a heavy volume of invoices and manage complex supply chains. If accounts payable is not automated, it can quickly become chaotic, expensive, and impractical to manage.  

In a high volume and often pressurised environment, accounts payable has their work cut out:  

  • entering invoice information into the finance system,  
  • routing invoices for approval,  
  • performing compliance checks,  
  • manually matching line items against purchase orders and receipts,  
  • managing exceptions,  
  • liaising with suppliers, and more.  

    Much of this work is slow and painstaking, with errors frequent. 

    Why automate accounts payable now?

    While these challenges are long-standing, the pandemic has brought many additional issues to the fore. These include: 

      • Supply chain disruption 

      If a manufacturer’s supplier is not able to deliver, then the manufacturer may need to onboard an alternate vendor in short order. Automation helps to make this process as quick and smooth as possible, minimising data entry and compliance checks for employees where errors and delays may happen.

      With an AP automation solution, bills are paid on time, every time. This helps to maintain the flow of money through the supply chain, enabling it to remain resilient. Making timely payments also help the manufacturer avoid any credit holds, which could disrupt production and be detrimental to sales and the brand.

        • Demand spikes

        For some manufacturers the pandemic has generated unprecedented demand. All companies need to be agile and able to increase production according to need. To do this, they need strong relationships with their suppliers. By automating their accounts payable and having a consistent payment track record, manufacturers may be able to achieve preferredcustomer status and enjoy competitive rates, terms, and service level agreements that will help them meet heightened demand. 

          • WHS Requirements

          Across industries, the pandemic has made workplace health and safety (WHS) critically important. In manufacturing, social distancing and working from home may be more problematic than for other sectors. For finance roles, however, remote and hybrid work should be very do-able using technology, cloud-based applications, and automation software.

          For example, by deploying an accounts payable automation product, manufacturers can centralise and digitalise this business-critical function. This means authorised users can view the entire invoice process lifecycle via a web browser – either onsite or offsite.

          With an AP automation product, manufacturers can receive their invoices electronically by email, or via the Peppol e-procurement network. Companies should discourage the continued sending of paper invoices, as these need to be scanned and emailed before the solution can process them.

          The automation software matches the line item against the relevant purchase order saved in the system and the goods receipt, before sending the payable to the finance system for posting and payment. If processing a non-purchase order invoice, the software will route the payable to the appropriate manager for approval, as well as identify and, where possible, manage any exceptions that accounts payable would otherwise have to resolve. Automation enables the highest rate of straight-through processing possible, while ensuring that no overpayments, fraudulent payments, or late payments are made.

            • Rising costs

            Due to the pandemic, part and labour shortages may increase costs, impacting on company profits. For example, there is currently a global chip shortage, which is affecting the production and delivery of cars, as well as other electronic goods. Likewise, labour shortages are putting upwards pressure on wages, which squeezes profit margins.

            To avoid passing on these rising costs to the consumer, companies can optimise and automate accounts payable and other business processes to increase efficiency and lower their operating costs. An AP automation solution will reduce costs, contributing to a healthier bottom line and greater customer and stakeholder satisfaction.

              • Increased digitisation across industry

              According to the 2021 Digital Transformation Assessment survey conducted by IBM and The Manufacturer, 67% of manufacturers have accelerated their digital projects because of Covid-19. For most, increased digitisation is about improving operational efficiency (92%) and operational resilience (88%) and extends from the production line to business processes.

              Some of the benefits of increased digitisation in manufacturing include:


              • improving efficiency,
              • increasing production,
              • reducing costs,
              • ensuring quality,
              • safeguarding employee wellbeing, and
              • delivering a better customer experience.

              In conclusion

              The pandemic has highlighted the limitations of existing business models across industries. Manufacturing has been particularly impacted by the pandemic and is rapidly adopting new technologies to ensure ongoing productivity and performance amid disrupted times. AP automation improves operational efficiency and resilience by:

              • centralising and digitalising the function,
              • lowering costs,
              • facilitating work from home, and
              • ensuring on-time and compliant payments.

              Business process optimisation and automation is an integral part of a company’s digital transformation program.

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