Best Accounts Payable Software and Systems

What is Accounts Payable Software?

Accounts payable software is a system that automates the process of business payments by utilizing a customized set of instructions built for each function.

Account payable software is part of broader accounting applications used by companies to track their debts and other financial responsibilities. There are three core modules of accounting and financial software: -

1. General ledger - Contains the company's financial records.
2. Accounts receivable - Responsible for charges that owe the company money.
3. Accounts payable - Takes care of company debts.

Accounting software is used to automate the handling of invoices and financial transactions between companies and their suppliers. Automating account reconciliation can reduce manual work, eliminate human errors, improve the efficiency and accuracy of the AP department, and help with other accounting tasks, such as financial closing.

The main difference between AP automation software and billing software is that AP automation only focuses on purchase transactions. In contrast, billing and invoicing software manages sales and purchase invoices.

Types of Accounts Payable Software

Accounts payable software tools vary widely in cost and accuracy, from free, basic packages to ultra-expensive and accurate ones. In addition to features, categorization criteria can also include functionality, such as some programs only dealing with online accounting software. In contrast, others are more advanced and allow accountants to create payrolls and third-party payrolls and track inventory.

The requirement of deployment is another imperative factor based on which there are:

1. On-Premises Accounts Payable Programs

   The client hosts them on their server and is covered by a single license.

2. SaaS Account Payable Program

   These programs typically cost per month and are hosted by vendors.

3. Cloud-Based Accounts Payable Programs

   Most of these offer free basic plans, and because they are universally accessible and there is no need to update or maintain them, they are considered the most affordable.

What are the Key Features of Accounts Payable Software?

Several accounts payable software providers are out there, and selecting one to use while comparing their features and pricing can be complex. Here are some of the features your business will need from accounts payable software -

1. Managing Invoices

   Invoices can be handled efficiently by a potential accounts payable system. Therefore, when selecting account payable software, keep invoicing capabilities in mind. With capabilities to generate invoices, your system can tell you when our business owes money, how much the amount is, and when the vendor expects to be paid.

   You can usually access invoices virtually anywhere with most systems. For example, an accounts payable system generally handles between 1000 and 2000 invoices per month. Additionally, it can initiate payments efficiently and promptly.

2. Automated Payments

   Automated payments are made easier with direct deposits. By automating your entire payment process, you can focus on the growth of your business. The system can input all the necessary vendor details from the database, saving you much time. Payments can also be prioritized at a specified time and date. In addition, paying your taxes electronically can prevent your business from being penalized for late payments.

3. The Reporting Tools

   AP is capable of providing real-time reporting without the need for human intervention. Ensures all business information is recorded, including balance sheets, tracking the previous day's activities, and reporting on revenue and costs. It mainly generates a report based on the company's total expenditures and specific payments between departments. In addition, it allows you to record payments directly into the software or import them from another integrated account. This allows for immediate access to critical information.

4. Managing Inventories

   Effective financial management is essential for any business. In particular, Businesses must take care of accounts payable and inventory. A company that keeps track of inventory turnover is less likely to run into a credit crisis. Consequently, the software ensures that you pay suppliers on time and manage your stocks to obtain supplier credit for purchasing more inventory, as suppliers can provide additional credit for buying more merchandise if you make timely payments.

What are the Key Benefits of Accounts Payable Automation Software?

This software not only automates tasks but also saves time and money.

1. Minimal Human Intervention

   An AP automation solution can decrease the amount of manual intervention that can impede the speed and efficiency of the AP team. The process of paying an invoice, receiving the necessary approval, and sending the payment can be lengthy if each of these steps is done manually. AP automation software can help eliminate most of these steps, letting AP teams do more than track down and pay invoices.

2. Reliability

   Companies achieve AP accuracy by matching POs, supplier invoices, and payments. This assures that they are paying only for what they purchased and that processing errors do not adversely affect their profitability.

3. Profitability (ROI)

   ROI can be achieved relatively quickly for AP automation software. It isn't expensive and runs on the cloud, making implementation easy. AP automation can save costs and increase productivity immediately.

4. Extensibility

   Businesses whose activities fluctuate in time may find the scalability of payables operations challenging. For instance, thousands of invoices may need to be processed per week or month during peak business periods, while at slower times, only a few invoices may be generated.

Accounts Payable Software - Some Important Integrations

The accounts payable process is not a stand-alone act but part of the broader business process. Therefore, your account payable module should ensure that the payables ledger information about the current liabilities is efficiently delivered to the balance sheet in the general ledger. Many integrated accounting systems automatically export Accounts Payable data in real time.

If that is not possible, verify that the Accounts Payable module exports data to the general ledger in a format that can be interpreted. AP is an integral part of every type of business, which means that you may need to integrate the AP tools with other tools related to your CRM system and sales processes. Here are three crucial AP integrations:

1. A CRM & Sales tool for tracking payments and bills can be processed further through an AP tool.

2. Billing software to calculate income and cost owed and integrate with an accounts payable database.

3. Payments can be made online to vendors and suppliers with digital payment wallets.

Accounts Payable Automation Software Trends

1. Cloud Solutions

   In addition to AP automation platforms, cloud-based options have several advantages over on-premises options. They can be more efficiently integrated into existing systems, such as an ERP, enabling product upgrades and new features to be released to customers more quickly. Additionally, companies can implement a prepackaged or customized AP automation platform faster, thereby increasing ROI.

2. Machine learning (AI)

   Artificial Intelligence (AI) can analyze large amounts of AP transactions to discover hidden errors. It can also be utilized to identify potential future issues with purchases, such as late payments. Artificial Intelligence (AI) can also create bots to assist employees and suppliers. While AI is still in its infancy, it is already used to improve accuracy and speed up managing large numbers of transactions.

3. Demand for Becoming a Profit Center

   ROI can be achieved relatively quickly for AP automation software. It isn't expensive and runs on the cloud, making implementation easy. AP automation can save costs and increase productivity immediately.

4. Extensibility

   Businesses whose activities fluctuate in time may find the scalability of payables operations challenging. For instance, thousands of invoices may need to be processed per week or month during peak business periods, while at slower times, only a few invoices may be generated.

Common Problem can Face with Accounts Payable Automation Software

There are still a few specific challenges that need to be addressed when looking for accounts payable software platforms despite the many benefits it provides -

1. False Claims & Human Error

   According to the Association for Financial Professionals, 74% of respondents said their organizations had been victimized by payments fraud in 2016, up from 61% in 2013. Utilize preventative measures such as using electronic payment, reconciling your checking accounts promptly, locking up your blank check stock, and centralized reviewing of your check writing process.

2. Automating Manual Processes to Digital Systems

   According to a report by HelpSystems, companies process an average of 290,667 invoices each year, 58% of which are sent by U.S. mail. A manual AP process can cost $35 more than an automated one.

3. Excessive or Insufficient Coverage

   A comprehensive AP solution is unnecessary for every company. It is imperative that an organization's software can handle the volume of invoices it deals with monthly. In addition, it should save the necessary data about the vendors it has relationships with.

Top 10 Accounts Payable Systems for Small Businesses

1. CaptainBiz

   All-in-one solution enabling you to create invoices, track inventory, manage customers and suppliers, and monitor cash and bank transactions. It is an affordable and easy-to-use solution for both GST and non-GST companies.

2. Vyapar - Accounting & Invoicing

   Vyapar is a GST-compliant invoicing and accounting solution. It allows users to create GST bills, fulfill orders, generate GSTR reports, track payments, and expenses, and manage inventory.

3. TYASuite Procurement to Pay

   The company provides exceptional cloud-based ERP solutions & the features include smart requisitions, full-proof data security, flexible purchase orders, dynamic invoicing, in-depth reports, and digital payments.

4. Horizon ERP

   Horizon ERP has an easy-to-use interface that makes learning more efficient. In addition, its robust platform can handle hundreds of thousands of invoices per year.

5. TallyPrime

   A leading business management solution, TallyPrime offers accounting, stock control, reporting, and payroll features without charging additional fees, making it affordable for small and medium businesses.

6. Nimble Property

   A comprehensive and tailored accounting and analytics platform for the hotel industry provides real-time insight and visibility into financial and operational data.

7. Lead ERP

   With Lead ERP, you can bridge the gap between generic accounting systems. Additionally, Lead ERP offers integrated EWay billing and electronic invoicing, cloud integration, and remote access.

8. Sage 50 cloud

   Sage offers a full suite of desktop accounting software that lets you focus on growing your business, not managing your accounts. In addition, Sage 50 cloud Accounting has allowed small and medium-sized enterprises to operate efficiently with its intuitive design.

9. Sage Business Cloud Accounting

   The Sage software for small businesses allows you to access essential information anytime, anywhere. You can manage cash flow, send and track invoices, and make invoice payments via cloud & mobile apps.

10. Hotelier Books

    With the best hotel management software in the U.S., Hotelier Books provides you with the tools to streamline your hotel's accounting and financial operations so that you can run a profitable operation.

Related Articles of Accounts Payable Software:

• Top 10 Best Accounts Payable Automation Software
• Top 7 Strategies for Optimizing Accounts Payable Process