Neglecting Automation Of Accounts Payable: The Hidden Risks
Coding Invoices
Organizations of all sizes have long broached the question of automating their accounts payable processes with software, invariably weighing the costs of implementation against the time saved. However, there?s third factor far too many finance executives overlook: the risks incurred by forgoing automation.
When organizations reject automated accounts payable (or AP), the repercussions can be dire. Many companies use outdated, manual processes to make payments and manage their invoicing systems. Manually coding invoices, for instance, is painstaking, labor-intensive task. employeerisk mistakes resulting from human error, rush, or confusion when they?re deciphering each line item. Without automation to accurately capture, record, and categorize invoices, business are exposed to myriad of financial risks.
The first is data accuracy. it is critical to maintain the veracity of accounts payable information to ensure regulatory requirements and maintain clear audit trail. Automation software quickly validates vendor data and categorizes vendors for streamlined reporting. Whit automated AP, there?s far greater confidence in the accuracy of the companies financial data, less susceptibility to double payments, decreased costs of operation, and minimal processing time.
The second risk is security exposure. Automation of accounts payable software helps organizations protect sensitive data securely with usernames and passwords, two-factor authentication procedures, or other secure identity measures. Furthermore, the additional layer of protection that automated AP systems provide helps companies avoid fraud and data breaches.
That?s not to say that automating accounts payable processes is foolproof system, but it is an invaluable safeguard compared to manual processes. Accounting software can improve internal controls to help organizations comply with regulatory requirements, ensure data accuracy and transparency for better decision-making and streamline processes for greater productivity and cost savings.
Looking more closely, several distinct advantages emerge from automating accounts payable. Organizations have real-time visibility into cash flow, which is incredibly valuable for financial forecasting. Plus, AP automation frees employeefrom mundane tasks like coding, so they can focus their attention on strategic initiatives.
Ultimately, automation of accounts payable offers significant cost-savings, better cash flow and more efficient way of managing invoices. Without it, companies leave themselves wide open to unquantified risk.
