Risk Of Not Automating Payment Process
AUTOMATE PAYMENT PROCESS
For finance executive tasked with managing the accounts payable process efficiently, the importance of software automation for payments cannot be overstated. Without the use of payment technology and software, invoices may be lost or processed slowly, and overruns on late payments can lead to steep financial penalties, and missed opportunities for improved cash flow and working capital management.
Without an automated payment process, reconciliations and compliance-oriented reporting become extremely challenging. As vendors increasingly require payments via electronic fund transfer, manual system of cutting checks and issuing batch payments introduces more risk into the equation including errors related to incorrect remittance information. This can subsequently lead to delays in payment and costlier dispute resolution processes, not to mention frustrated vendors.
To further complicate the matter, manual processes require more man-hours, resulting in labour cost and further inefficiencies while verifying, approvals and payments may be misplaced by finance teams. Additionally, human errors can lead to unauthorized payments, late payment charges and fines, as well as time-consuming manual audit processes.
The implementation of payment processing technology and software alleviates many of the challenges outlined above, streamlining the entire process of receiving and processing supplier invoices, validating accrued data, creating payments, and reconciling accounts. Automation also increases visibility into the accounts payable process, allowing finance teams to identify errors, gain better understanding of financial performance and obtain an improved cash flow outlook.
More specifically, automation makes checks more secure and reduces the risk of fraud, as it “enables the finance team to implement strong oversight controls on payment initiation and approval.” In an increasingly regulatory landscape, automation of the entire payments process with built-in controls allows for businesses to demonstrate compliance with policies and practices, saving the time and money associated with lengthy audit processes.
In conclusion, the risk of not automating the payment process is greatly outweighed by the benefits of implementation of automated accounts payable software. Driven by increased security, process efficiency and cost savings, automation enables companies to optimise the payment process and establish stronger control environment.
