The Dangers Of Not Adopting An Accounts Payable Automation Software
CENTRALIZED INVOICE PROCESSING
As Financial Executive, you may be asked to evaluate the impact of adopting an accounts payable automation software. It is likely that the benefits of such move will be discussed: the potential for improved efficiency, cost reduction, and better data handling and reporting. However, what may be less clear is the risks associated with the decision to not automate accounts payable.
When business decides to forego automation software, they are exposed to set of potential risks that will have varying impacts on the company. At its most basic level, declining to invest in an automation software means relying exclusively on manual processes and procedures. This decision can have drastic consequences, exposing businesses to financial instability, security threats, and compliance risks.
The first and most immediate risk associated with manual accounts payable processing is that it will not be as efficient as automated systems. Depending on the scale of the companies operations, this inefficiency is likely to lead to greater expenses from additional costs and resources. For larger companies, the impact is more considerable, as they are more likely reliant on their accounts payable systems for large parts of their finances.
The second risk is related to security. Manual accounts payable systems lack the integrity and security of automated software, leaving companies vulnerable to potential threats and manipulation. Those relying solely on manual invoicing and processing may find it difficult to detect potential fraud. As result, companies are at risk of being exposed to serious financial losses and legal liabilities.
Finally, adhering to governmental regulations and compliance may be significantly more difficult without an automated accounts payable system. Investors, suppliers, and creditors may become suspicious of companies failure to utilize an automated system and therefore question their transparency and reliability. Companies, therefore, can be at risk of reputational damage or, in severe cases, breaking the law.
Taken together, it is clear that there are significant risks for relying solely on manual accounts payable processing. Automated systems not only ensure companies financial health and security, but also provide much greater degree of efficiency and compliance assurance. Deciding to not commit to an automated accounts payable system may seem like cost-saving measure in the short term, but the long-term risks and implications for both the company and its investors should not be underestimated.
