Risks Of Forgoing Accounts Payable Automation Software
BEST PRACTICE ACCOUNTS PAYABLE
Accounts payable automation software is quickly becoming an automatically assumed component for all financial operations. This software helps to reduce manual labor, increase control of accounts, and prevent human error from entering the equation. With its widespread integration, it can be easy to forget that if the software isn’t used, there are significant risks of inaccuracy and inefficiencies that financial teams ought to consider.
The majority of the risks incurred by foregoing AP automation software boil down to lack of speed and accuracy. Without the software, accounts payable teams are handling payments manually, which can lead to inconsistencies, payment misdirection, and confusion, as well as potential for time-consuming double or even triple data entry, which can lead to further errors and slow down operations. Moreover, manual data entry increases the likelihood of inconsistencies in recording, data entry errors, and generally inaccurate financial records resulting from manual data entry. In addition, these manual processes leave financial teams unable to direct the payment of invoices from multiple sources, such as paper checks and electronic payments, and unable to track these payments or have their status reported to the company.
Without the proper software, companies also risk paying invoices late which can lead to late fees and interest and/or decreased corporate credit. Additionally, manual processes decrease visibility, making it difficult to stay one step ahead of accounts payable while being able to forecast costs and strive to work with vendors under more favorable terms. Furthermore, attempting to manually manage reports and reconciliations can easily become source of frustration and time consuming task, and an accounts payable team cannot devote the same amount of attention to large strategic decisions with discrete data.
In conclusion, though the immediate endeavor to transition to accounts payable automation software may seem complicated, it will ultimately provide the most cost-efficient, accurate and timely process for accounts payable operations in the long run. By investing in this software, companies reduce the amount of time that finance staff must spend on manual entries, reduce cost and help secure the integrity of their financial data. With properly managed accounts payable automation system, companies can also anticipate cost savings and improved performance of their accounts payable process.
