Mitigating Risk Of Not Utilizing Accounts Payable Automation Software
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For finance executives in search of operational efficiency and value improvement, implementing an accounts payable automation software (APAS) solution presents an attractive pathway for realizing cost savings and transforming accounts payable processes. While taking advantage of technological advances in enterprise computing holds great potential for streamlining finance operations, there is also associated risk in not utilizing accounts payable automation through an APAS.
The nature of this risk can be divided into categories based upon set of distinctions in the degree of their relative implications to the organization financial, strategic, and legal. From financial perspective, the failure to integrate APAS into the accounts payable process can lead to increased penalty fees for errors, late payment fees and lost discounts due to slow invoice approval times among other financial penalties. Strategically, the inconsistency in invoice processing speeds can seriously damage supplier relationships and decrease customerservice. Finally, disregarding APAS carries inherent legal risk as the lateness of invoice processing can often lead to missed deadlines and contractual legal breaches.
The fiscal cost of not taking advantage of APAS should not be understated. lack of automated controls to oversee payments can lead to high occurrence of human errors and duplicate payments, adding unnecessary additional spending. This kind of negligence in accounts payable processes can lead to significant losses for the organization through inefficient operations and increased transaction costs.
Without APAS, the ability to oversee and track the multitude of invoices received on daily basis is hindered, creating misalignment between the material and the financier?s expectations. Actions taken are not readily accessible, there is often no ability to report on information or assess performance metrics and transparency of the process is greatly restricted.
At strategic level, the absence of comprehensive APAS can lead to irreparable damage to the customersupplier relationships. Delayed invoice payments result in poor customerservice and customer experience, leading to decreased confidence in the supplier, potentially leading to their absolution from the vendor pool.
Finally, the failure to employ APAS can bring significant legal risk for the organization. Without Softwaresolution that barters with time, there is an increased chance of missing contractual deadlines and even, potentially, the breach of certain laws through overdue invoices. Whether legal breach is accidental or intentional, it can lead to grave implications for the business.
In summation, not utilizing accounts payable automation software carries significant risk for financial executives and organizations. While investing in APAS comes at an upfront cost, the potential negative costs in the form of legal action, financial penalties and sunk costs make this expense worthwhile investment.
