Risk Of Ignoring Accounts Payable Automation
AUDITING ACCOUNTS PAYABLE
Using software to automate accounts payable can be vital element in streamlining financial operations. As finance executives become increasingly more responsible for cost efficiency, the risk of not utilizing an automated accounts payable process must be seriously considered. In order to maximize savings, ensure compliance, and avoid errors and inefficient manual processes, finance professionals must weigh the cost benefits of utilizing accounts payable software.
One of the primary risks of not using accounts payable automation is the potential for manual errors. Human error can undermine the accuracy in processing and compliance in data, resulting in potential fines. Automation eliminates the risk of employee error, as well as the input of incorrect data. This is especially critical for organizations with operations spanning multiple states or countries, where compliance can be complicated. Automation also eliminates the risk of forgetting to use payment protocols, invoice duplicates, and duplicate paychecks.
Manually-processed accounts payable can be incredibly labor-intensive and time consuming. The manual process entails manually entering data into an accounts payable system, which can lead to discrepancies in transactional data and failure to adhere to best practices. There is also significant risk of lost or destroyed invoices and receipts during manual processes. Automation eliminates the possibility of errors in manual processes, creating single source for data entry and allowing for faster cash flow times.
Manual accounts payable processes can prove to be costly and inefficient for organizations. Without the checks and controls for accuracy and compliance that automate accounts payable offer, organizations may be exposed to unnecessary risk. Additionally, without the internal controls that automation provides, there is the potential for fraud or unethical activities, or simply, the potential for duplicate payments or other financial losses. Automation permits visibility into direct accounts payable and allows organizations to establish and maintain accurate records.
The use of automated accounts payable software also permits more efficient and accurate reporting, as organizations can quickly and efficiently drill down into insights tied to accounts payable. Automation offers real-time access to all invoices, payments, and other related transactions. This allows organizations to audit financial data, review each invoice, and identify any potential discrepancies.
Taking into account all the risks, utilizing accounts payable software offers the potential for significant cost savings, increased process efficiency, and improved compliance. Automation mitigates the risks associated with manual accounts payable processes, allowing finance executives to maximize cost efficiency, adhere to compliance, and reduce the risk of errors or unethical activities. Although there is an initial cost outlay associated with implementing accounts payable automation, the long-term positive impacts are certain to outweigh the investment.
