Optimizing Accounts Payable: Unveiling The Risk Of Not Utilizing Automated Software
B2B Payments Solution
For successful business, the accounts payable process is essential for accurate and timely payments to suppliers. As financial operations evolve to accommodate remote business models with frequent micro-transactions, manually managing payments is becoming increasingly inefficient. Companies large and small must secure the highest quality technology and resources available to ensure their accounts payable process is consistently up to date.
Without automated software for Accounts Payable processes, companies are at greater risk of expending significant funds and damage their relationships with vendors. As such, Finance Executives must consider the risks and consequences of not leveraging automated software to optimize accounts payable operations.
A study by Harvard Business Review revealed that similar companies expressing an interest in Accounts Payable Automation (APA) experience an average savings of 5.1% in reduced costs. Additionally, one in three companies who invested in an automated APA system reported cost reduction rate upwards of 10%. Those benefits translate to more money staying in the company coffers, allowing business to scale more quickly, expand their operations and forge more profitable partnerships.
On the surface, avoiding the initial costs associated with payments solution may appear to save money. However, foregoing the purchase and implementation of automated software for Accounts Payable processes can lead to expenses with long-term, cumulative consequences. Many organisations underestimate the cost of manual processing, which leaves businessesusceptible to financial risk in the form of vendor late payments, error-prone manual invoices and labor costs associated with manual data entry.
With manual accounts payable processes, tedious and labor-intensive data entry for payment is required. This can lead to reduced productivity, backlogs of information and errors in data entry when the process is not efficiently managed. It can therefore become difficult to quickly audit and confirm accuracy while cases of duplicate payments are likely to amplify inefficiencies. The cost of manually managing stagnant invoices and supplier payments can be considerable, including the cost of staff salaries and training.
In contrast, optimizing Accounts Payable processes with automated software can dramatically reduce operating costs and risks associated with inaccuracies. Automated payment tools eliminate manual data entry, optimise processes and make it easier to audit and confirm accuracy. This can reduce labor costs, improve the accuracy of invoicing and help guarantee prompt payment to vendors. Additionally, suppliers are more likely to become productive partners when they receive payments accurately and on time.
The accounts payable process is an integral part of any business. For Finance Executives, the implementation of automated software which can accurately and securely manage payments is essential for navigating the unprecedented complexity of modern financial operations. While the upfront investment in such system may incur some initial costs, the long-term savings and revenue earned due to automated financial operations is infinitely more valuable.
