Risks Of Forgoing Electronic Invoicing Software
AR ELECTRONIC INVOICING SYSTEM SOLUTION
Organizations often underestimate the seriousness of adopting an electronic invoicing system to streamline and oversee accounts payable operations. The interactive data integration capabilities of digital solutions optimize manual processes, resulting in greater efficiency and, ultimately, cost-savings. However, many finance executives overlook the risks of not using an accounts payable automation software.
Not having an electronic invoicing system in place can be costly in multiple ways. If manual system is being used, the impact of an invoice being processed weeks too late could be felt for months, in the form of late-payment penalties, higher interest costs, and/or damaged supplier relationships. Human error is also more likely to take place when completing manual processes, leading to potential overpayment or missing invoices, which in turn could lead the company to overcompensate the supplier or to not pay them what they are owed. This can result in disputes that are often time consuming and expensive to resolve.
Without reliable electronic solution to track invoices and payments, companies also put themselves at disadvantage to gain visibility into liabilities and cashflow. This can lead to expensively investing in capital or taking out loans in anticipation of outlays of funds that may not be necessary. Furthermore, in the event of an audit, not having the necessary documentation can lead to unnecessary fines from the tax authorities or the Internal Revenue Service.
In addition to the economic implications, forgoing automated invoice processing undermines productivity. Managers and finance executives must manually review and approve invoices, wasting valuable time better spent on other activities. While forgoing accounts payable automation may look like cost-saving measure, it erroneously avoids long-term costs and sacrifices the opportunity for greater productivity and control.
To avoid these risks, comprehensive accounts payable automation system should be implemented. While the software might initially come with monetary cost, it is expected to provide return on investment due to improvements to cashflow, lower rates of fraud, and fewer problems stemming from the delay of financial commitments. The technology allows an organization to better manage liabilities and cashflow, simplifying tasks like audits and reporting. Furthermore, utilizing an electronic invoicing system reduces the potential for human error and associated expenses. An accounts payable automation system offers numerous benefits, and is necessity for any business that wishes to ensure the stability and security of its accounts payable operations.
