The Cost Of Neglecting Accounts Payable Automation Software
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businesses of all sizes face wide range of financial complexities, including managing cash flow, forecasting profits, and ensuring timely payment of vendors. To effectively handle these elements, they must have clear and efficient accounts payable process. An automated solution is the best option for streamlining payments to ensure accuracy and timeliness, helping both start-ups and established companies to better manage their financial resources.
According to the Institute of Financial Management, accounts payable automation reduces manual processing costs, imposes better control over payments and financial data, and increases the accuracy and speed of the entire accounts payable process. Automation also reduces human errors, removing the potential for human interference and speeding up consent, payments and reconciliations. This results in improved cash management and greater peace of mind for businesses.
The CFO?s decisive role in choosing the right accounts payable automation software for their business is essential for achieving an optimal balance between automation and financial savings. Yet, opting for lack of automation can result in havoc and carry significant risk. Consider the following five risks CFOs should avoid when it comes to accounts payable automation:
1. Duplicate Payments and Overpayments: Implementing an automated accounts payable software allows businesses to catch typos, errors or duplicate payments while they?re still in the authorization process. Failing to invest in automation can result in overpayment due to errors or duplicates, costing businesses unnecessarily and devastating cash flow.
2. Delayed Payments: Automated payable processes allow businesses to set terms, approve and pay in timely manner, ensuring vendors and other stakeholders are paid promptly and vendor relationships are retained. Delayed payments due to lack of automation can result in interest charges, penalties, and significantly diminished relationships between the company and its vendors.
3. Poor Visibility Over Accounts Payable Information: Automation provides finance executives with access to database of real-time data, where they can view and track expenses, monitor payments, and gain insights into accounts payable performance and cash flow. Not having this visibility may prevent businesses from streamlining operations, identify problems and uncover opportunities to reduce costs.
4. Imposed Legal Non-Compliances: Compliance is must for any organization. Automation allows finance executives to be aware of the continually changing external legal environment and meet payments accordingly, ensuring they remain compliant. Conversely, non-compliance can lead to serious sanctions and hefty fines.
5. Lost Opportunities: Automation also allows businesses to make payments to vendors without carrying out paperwork and manual data entry. This eliminates fraud and creates more efficient Cash Flow Cycle that leads to economic growth and better cash management. In addition, automated payments offer the opportunity to take advantage of discounts when paying vendors within certain timeframe.
Given the range of risks associated with neglecting accounts payable automation software, CFOs should prioritize investing in an automated solution to make accounts payable processes faster, more accurate, and more compliant. Automation provides not just peace of mind, but frees time for CFOs to focus on more strategic activities such as budgeting, cash flow optimization, and corporate financial performance. It is very unwise to underestimate the importance of accounts payable automation, the financial repercussions of neglecting such software could be catastrophic.
