Risk Of Foregoing Automated Accounts Payable
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Amid the tumultuous state of finances and cash flow, many organizations have increasingly valued the advantages of accounts payable (AP) software. Among those benefits, faster and more accurate payments, better budgeting control, and enhanced visibility are all attainable goals for CFOs.
While the downsides of manual accounts payable are plentiful, from redundant data entry, personnel turnover, and misplaced documents, it is important to recognize that ceasing to use AP software entails certain risks as well.
Management of corporate liquidity is major area of concern for chief financial officers that use automation for AP. Cashflow can become highly vulnerable without AP software due to the lack of real-time analytics, or guidance regarding the most efficient payment timing and vendors. Without insight into the AP workflow and potential optimization potential, company risk falling into the danger of inadequate liquidity. Furthermore, accelerated cash collection times and effective utilization of resources could be inhibited, in addition to lowered digitization compliance.
In terms of oversight, the obligations to comply with internal controls and external regulations can be hectic in manual AP environment. Without an automated, internal audit isolution, companies may be exposed to numerous sources of financial risk when tracking invoices and payments. There are also production costs that can mount. Not to mention, costly personnel-related risks with bottlenecks in workflow resulting in late payment penalties, spiking interest costs, or worse, errors and unrecorded liabilities.
Automated AP solutions can save times and money in the long run. For example, accurate and up-to-date information can be provided on demand by the software, greatly speeding up the approval and payment of invoices. Given that many vendors demand electronic payment, automated payments could fundamentally save organizations from paying costly fees for services like bank drafts and checks.
The path to financial resilience begins with greater visibility into corporate cash flow. Automated accounts payable software can provide invaluable insight into where and how to optimize resources in order to mitigate cash flow shortfalls and reduce risk. These solutions bring much-needed control and efficiency that is beneficial both internally and externally. By providing the C-Suite with roadmap to make smart and strategic decisions, automation is key ingredient for keeping organizations on financially stable footing.
