The Peril Of Ignoring Accounts Payable Automation
AUTOMATED ACCOUNTS PAYABLE PROCESSING
Accounts payable (AP) automation is key element in streamlining the financial supply chain and its associated accounting practices. Without it, finance executives face an array of risks, including inefficiency, unnecessary expenditure and long-term uncertainty. It is an increasingly pertinent issue as businesses strive to push through the pandemic-induced market downturns and retain control of their inner workings.
By automating AP processes, businesses can reap myriad advantages. Of primary importance is reduced manual workload, freeing up resources to divert to higher-value activities. It also aids in streamlining workflows, eliminating non-essential steps and providing finance teams with unprecedented clarity of their current financial performance. The removal of menial AP tasks also not only reduces the risk of costly errors, but also minimizes the need for costly double-checks.
When automation is absent, the short-term consequence is often inefficient and costly operations. Invoicing workload is higher, AP staff turnover can be problematic, and reconciliation of incoming payments can become an arduous task. There is also an associated increase in the possibility of misreported VAT, incorrect payments, and potentially fraudulent transactions that become hard to trace.
The costs of not automating AP operations can quickly add up. Manual processes require more staff, skilled and not, resulting in higher long-term payroll costs. Moreover, with increased AP workload, workforce attrition can lead to further hiring costs and lack of continuity. In addition, expensive penalties can be levied against businesses that fail to observe accurate reporting, while instances such as missed payment deadline delays can irreparably damage supplier relationships.
At higher level, non-automated AP can impede greater digital transformation of financial operations. That missing link not only inhibits information accuracy, but also contributes to lag in supplier payments as they become tied up awaiting manual approval. In an accelerating corporate landscape, stymied technology investments can limit businesses prospects for growth and profitability.
Overall, the risks of not investing in accounts payable automation can prove costly and constraining for businesses. By investing in the right kind of AP software, executives can be assured of improved oversight and streamlined processes that substantially reduce the financial risks associated with non-automated operations. After all, robust financial operations plays an integral role in the survival and success of any business.
