Electronic Data Interchange – EDI

How to Automate Accounts Payable Management

accounts payable management

Accounts payable management is one of the more tedious processes in accounting departments. It is a delicate part of the relationship between a company and its suppliers because payment times are as important to the supplier as timely delivery of the product or service is to the customer. 

Implementing a solution to digitize and automate accounts payable offers many advantages and has only one disadvantage: resistance to change in internal processes of companies, especially those that have not yet taken the step toward digitalization. To overcome resistance to change, it is crucial to analyze the accounts payable management process from the perspective of resources, time, and potential errors or document loss that are common in manual processes.

What Problems Arise from Receiving Invoices from Suppliers?

Managing a large volume of physical documents from different suppliers poses difficulties in their management. From the issuance of a purchase order to payment, different documents (delivery notes, invoices) must be manually processed. This part of the back office can involve several departments (purchasing, accounting) that must receive, verify, record, transfer, etc. invoices. All of this must be taken into account.

  • Errors. Manual management always increases the likelihood of making mistakes compared to automation.
  • Longer processing times.
  • Disparity in formats, communication channels, invoice data, and compliance requirements.
  • Archiving. All documentation must be properly archived, whether in digital format such as PDF invoices or physical copies. This also involves time, space, and expenses for paper.

How to Automate Accounts Payable Management?

Technology facilitates the optimization of internal management processes in companies. Especially, all those solutions created from EDI (Electronic Data Interchange) allow the digitization and automation of information and document flows. In the case of accounts payable, technology based on electronic data exchange makes it possible for a complex management process to become simple and agile.

To start the change in accounts payable management towards a digital solution, it is recommended to:

  • Analyze the current situation and assess the advantages of the change in quantitative and qualitative terms.
  • Have a specialized technological provider that offers suitable solutions that integrate different workflows and the agents that interact in the company's ecosystem.
  • Bet on scalable technological solutions that facilitate evolution according to the company's needs.
  • Conduct pedagogy towards suppliers, as some of them may be small companies with a low volume of invoices that do not have an integrated solution for electronic data exchange and may be hesitant about the tool. At this point, it is very important to convey the advantages of optimizing accounts payable through digital solutions.

Supplier Portal for Automating Accounts Payable Management

EDICOM has developed the Supplier Portal for automating accounts payable management. It is a centralized and scalable solution for receiving invoices from suppliers in multiple countries in accordance with legal requirements and through a single management environment. This tool is valid for both EDI solution providers and those who do not have an integrated solution.

The platform allows for the automatic publication of purchase orders generated in the company's ERP. Suppliers are notified by email, informing them that they have pending documents to review. Once they access the platform, they can view, print and download orders, as well as generate and send invoices through the same channel, integrating with the company's ERP.

Supplier Portal functionalities

The company implementing the solution automatically sends the purchase order to its supplier.

  1. Purchase order data is imported from the client's management system to the Supplier Portal.
  2. EDICOM recognizes the recipient of the orders. In the case that the supplier is not an EDI trading partner, the order is transferred to the portal, and the supplier is notified of the availability of a purchase order via an email with direct access. The supplier accesses the portal where they can view, download, and print their orders.
  3. The supplier can generate invoices from the portal based on the orders received. In a very simple way, through very intuitive web forms, the supplier completes the necessary invoice information for accounts payable management (invoice number, invoice date, etc.).
  4. If necessary, the supplier can attach a visual representation of their PDF invoice.
  5. Once validated, the invoices are integrated into the accounts payable management system, automating matching and accounting processes.

Benefits of the Supplier Portal: from Purchase Order to Invoice Payment

Digitizing and automating accounts payable saves time, increases a company's financial efficiency, and reinforces trust between customers and suppliers.

  • Automation in the sending of orders. Sending a purchase order no longer requires generating a visual representation of the order for sending by email or fax. Simply register it in the ERP so that it is instantly published on the portal and notified to the suppliers.
  • Simplifies the process of issuing electronic invoices by using the same data as the purchase order.
  • Automation in the receipt of invoices. You no longer must receive invoices by postal mail or even email. There is no need to download them, open them, and register them in your management system. Your suppliers indicate the order to be invoiced, record the key data not included in the order, and an invoice is automatically received and integrated into your management system.
  • Traceability of the entire purchase-sale flow. The matching process is much simpler, as the invoices are generated from the purchase orders published on the portal.
  • Simplifies the matching of the invoice with the purchase order for automatic integration into the accounts payable application.
  • Compliance. Generation of documents in accordance with the legal and technical requirements of each country. The platform incorporates electronic signature services as well as legal custody of the documents for the legally established time.
  • Cost savings. The reduction of response times, the elimination of errors, the elimination of the use of paper. The advantages obtained result in an increase in the efficiency of your operations and consequently, in greater productivity that reduces the costs of your purchasing management.

Why Automate Accounts Payable Management?

Contact our specialists and find out how you can optimize your accounts payable process.

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