6 Benefits of Integrating AP Automation with Your ERP System

For mid-sized businesses in industries like healthcare, manufacturing, and hospitality, managing accounts payable (AP) can feel overwhelming.

Manually processing invoices is not only slow and error-prone but also eats into resources that could be spent on growth and strategic initiatives.

But there’s a solution: AP automation.

By integrating AP automation with your existing ERP (Enterprise Resource Planning) system, you can streamline processes, enhance accuracy, and gain better financial visibility —all while reducing costs and improving relationships with your suppliers.

In this article, we’ll explore the benefits of integrating AP automation with your ERP system and how it can improve your business operations.

Let’s dive into the six benefits.

Contents

Streamlined Invoice Processing
Enhanced Financial Visibility
Cost Savings and Efficiency Gains
Strengthened Supplier Relationships
Improved Compliance and Risk Management
Reduced Licensing Costs and Improved User Experience
Conclusion
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1. Streamlined Invoice Processing

One of the most significant advantages of AP automation is how it simplifies invoice handling. Instead of spending hours on data entry, automation allows your system to process invoices more quickly and with fewer errors.

The benefits of streamlining invoice processing include:

Faster Invoice Approvals: Automated workflows route invoices to the correct person for approval based on pre-set rules. Finance teams can approve payments via email or mobile devices, without logging into the ERP system each time. This is especially helpful for companies with multiple locations. The result is fewer delays, timely approvals, and the ability to capture early payment discounts, ultimately improving cash flow.
Reduced Manual Tasks: For mid-sized companies, automating repetitive tasks like data entry and verification allows finance teams to focus on more strategic work. With fewer manual tasks come fewer errors, which improves overall financial operations.
Improved Data Accuracy: Automation reduces human error in transaction processing. Features like error detection and duplicate payment prevention ensure accurate, reliable data – critical for businesses managing large invoice volumes. For companies spending over $25 million annually on suppliers, accuracy and reliability are key to smooth operations.

Faster approvals and a smoother payment process will help your business run more efficiently and stay competitive.

How fast?

AP automation can reduce the time it takes to process invoices from 45 days to just 3 days, which is really important for businesses that deal with more than 2,000-3,000 invoices per month.

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2. Enhanced Financial Visibility

Financial visibility is a priority for mid-sized companies looking to make informed, data-driven decisions. The benefits of integrating AP automation with your ERP system gives your finance team real-time access to data that can help with everything from forecasting cash flow to monitoring key metrics.

The integration enhances financial visibly with:

Real-Time Reporting: Companies that handle thousands of invoices per year benefit significantly from real-time reporting. AP automation combined with ERP systems allows finance teams to easily generate reports that support strategic decisions. It also provides real-time updates on payment statuses, reducing communication problems with suppliers and improving transparency.
Comprehensive Financial Records: Automated systems create detailed records of every transaction, simplifying compliance and audit preparation. For mid-sized businesses, maintaining accurate financial records not only improves management but also reduces the time and effort required during audits.
Better Cash Flow Management: With better visibility into payment schedules and outstanding invoices, mid-sized companies can fine-tune their cash flow strategies. Automation helps capture early payment discounts and reduces the time spent managing vendor payments, improving overall financial outcomes.
Improved Cash Flow Forecasting: Accurate data enables better cash flow forecasting, allowing companies to predict their financial position and make informed strategic decisions based on real-time information.

AP Automation offers a huge benefit to CFOs and finance teams as it helps companies manage cash flow and see their financial position more clearly.

3. Cost Savings and Efficiency Gains

Integrating AP automation with your ERP system can save mid-sized businesses a lot of wasted spend. By automating tasks that were once done manually, AP automation reduces the amount of resources needed for processing invoices.

Here’s how this integration leads to cost savings and efficiency gains:

Elimination of Duplicate Payments: Duplicate payments can drain your company’s resources and create cash flow issues. AP automation ensures that duplicate payments are caught and prevented before they occur, improving data accuracy and reducing waste.
Early Payment Discounts: Faster invoice processing means payments are made on time, allowing companies to consistently capture early payment discounts from suppliers. These discounts can significantly improve cash flow and reduce overall procurement costs.
Reduced Processing Costs: Automating routine tasks in accounts payable significantly reduces manual work and eliminates the need for paper invoices, which can lower processing costs by up to 81% and reduce the cost per invoice from $15 to $2.94.

For businesses that process 20,000 invoices, an ERP integration can mean saving up to $240,000 per year.

4. Strengthened Supplier Relationships

Timely payments are crucial for maintaining positive relationships with suppliers. AP automation plays a vital role in making this possible, helping companies secure better terms and build trust.

The integration strengthens supplier relationships by:

Processing Supplier Payments: Automated systems schedule payments on preferred dates and ensure timely processing, reducing the risk of late fees and improving supplier satisfaction. By processing payments accurately and on time, businesses strengthen their reputation as reliable partners.
Enhancing Communication: With real-time updates on payment statuses, suppliers can easily track when they will be paid, reducing uncertainty. This transparency improves communication and builds stronger partnerships.
Improving Supplier Satisfaction: By consistently meeting payment deadlines, businesses earn the confidence of their suppliers. Automated workflows enable real-time updates, further improving trust and laying the foundation for long-term partnerships.

It’s because of this that 40% of AP leaders encourage their suppliers to switch to electronic invoicing, which speeds up payments and makes suppliers even more satisfied.

5. Improved Compliance and Risk Management

Integrating AP automation with ERP systems makes it easier for businesses to follow regulations and manage risks by providing detailed, traceable audit trails for every transaction.

Here’s how this integration enhances compliance and risk management:

Automated Audit Trails: ERP systems combined with AP automation offer real-time tracking of transactions, making it easier to comply with legal and regulatory standards. These systems generate detailed audit trails that simplify the audit process and improve overall financial management.
Fraud Detection and Prevention: Automated AP systems improve fraud detection by tracking payments in real time and spotting irregularities before they become problems. This makes your payment environment safer and reduces the risks associated with fraud.
Enhanced Data Security: Strong security features like encryption and user access controls ensure sensitive financial data is protected. These measures reduce the risk of data breaches, keeping your financial processes secure and in compliance with industry standards.
Greater Control and Oversight: Automation allows finance teams to set approval limits and permissions, improving oversight of the AP process. This ensures that invoices are properly vetted before payments are made, which reduces risks and enhances accountability.

Since 78% of businesses were affected by payment fraud last year, AP automation has become an important tool to help manage and reduce the risks of fraud.

6. Reduced Licensing Costs and Improved User Experience

We have saved the biggest benefit for last.

A major advantage of integrating AP automation with your ERP system can be the reduction in user-based licensing costs.

ERP systems are built for finance teams and often charge per user, making it costly to have authorizers or non-finance employees access the ERP just to approve invoices.

AP automation platforms eliminate this issue by providing an intuitive, user-friendly interface that doesn’t require additional ERP user licenses.

With Rillion, all invoice approvals can be handled within the AP automation system, which is designed specifically for users and approvers.

For businesses that operate across multiple ERP systems, Rillion integrates seamlessly, allowing users to manage everything in one system instead of switching between multiple ERPs, further enhancing efficiency.

Conclusion

The benefits of integrating AP automation with your ERP system are clear; not only does it speed up invoice processing and enhance financial clarity but also significantly cuts operational costs and strengthens supplier relationships.

The transition to automation may present some short-term challenges, but the long-term benefits—from improved compliance to better cash flow management—set your business up to thrive in a competitive market, ensuring long-term growth.

Ready to integrate your ERP with Rillion?

Rillion integrates seamlessly with popular ERP systems like SAP, Microsoft Dynamics, and Sage X3, making the transition to AP automation smoother than ever.

Book a personalized demo today! We’d love to talk.

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