Risks Of Not Adopting Software For Early Payment Solutions
EARLY PAYMENT SOLUTION
As an executive focused on optimizing the efficiency and profitability of modern business, few tasks are as relevant to your interests as paying bills. With an Accounts Payable Automation (APA) software, business entities have the opportunity to reduce costs associated with manual payment processes and optimize their working capital for maximum gain.
Whether the decision to introduce such system is driven by strategic or financial motives, one cannot escape the fact that failing to take this step has several risks associated with it. The following are only few examples and serve to illustrate the potential dangers of not implementing an APA solution.
One potential risk of not utilizing an APA solution is being unable to reap the benefits of early payment discounts. Companies may incur late fees due to manual process bottlenecks and lack of visibility into supplier payments. Furthermore, manual system does not have the capacity to rapidly and accurately check each payment for accuracy, thus also increasing errors and lost time.
Equally, the lack of process automation can result in an unsustainable cash outflow being created. That is, manual systems can lack the capability to prompt payment in timely fashion, leading to delays in payment and putting strain on cashflow. This can further exacerbate the risk of potential bad payments the kind that occur when vendor reclaims payment due to errors or dispute, resulting in added cost.
On more technical basis, the lack of digitalized processes can all but ensure repeated manual data entrees and lack of digital audit trail, risking non-compliance with current financial regulations and resulting in associated obligations rising. Finally, due to the fragile state of data safety, manual payment processes expose businesses to potential data theft and fraud.
In summary, employing an APA software solution mitigates the above-mentioned risks associated with manual payment processes. As Finance Executive, providing this kind of technology to your organization has the potential to serve as significant aid in your efforts to optimize processes efficiency and profitability.
