Assessing Potential Cost And Risk Of Not Utilizing Accounts Payable Automation Software
Early Invoice Payment Companies
As venture capitalists compete to make investments in early invoice payment companies, C-level executives in the finance sector are tasked with analysis and understanding of the potential cost and associated risk of not utilizing accounts payable automation software. With the development of more comprehensive technology, the primary factor in decision-making process of whether to purchase accounts payable automation Softwareshould be the potential cost savings from investing in such technology relative to the incurred risk.
Undertaking this analysis requires close examination of the most prominent risks of not utilizing automation that face organizations. These risks are generally classified into operational, financial, and compliance-oriented elements. For example, operational risk surrounds the accuracy and reliability of the data used to make decisions and the speed at which labels can be processed by the human element. Financial risk is highly contingent upon an organizations ability to monitor supplier capacity and accurately assess late payment penalties, while compliance-related elements include clearly-following laws, regulation, and internal policies.
Moreover, in scenario when organizations do not embrace automation, executives may face other costs resulting from human error, such as missclassification of payments, failure to follow regulations, incorrect data entry, and lack of integrity. Automation eliminates the potential for costly manual errors and the associated risk, thus freeing up the execs to focus on more strategic operations.
In addition, accounts payable automation software can present an opportunity to enhance an organizations? accounts receivables, with organizations given access to analytics, reporting, and forecasting capabilities to better manage their business. This is beneficial to both entities and customers, as the software dynamically assigns due dates and payment terms, including discounts, payment incentives, and available liquidity.
In short, the true cost of not investing in accounts payable automation software is hard to predict as organizations may be unaware of the current financial losses caused by manual errors. However, it can be argued that the potential cost savings from the streamlining of processes, increased accuracy of financial transactions, and improved customer relations are salient enough to highlight the value of investing in accounts payable automation software.
