The Pitfalls Of Failing To Automate Accounts Payable With Software
AUTOMATED AP PROCURE TO PAY SOLUTION
The decision to automate financial processes such as accounts payable carries great magnitude for business operations. In the context of accounts payable, automating the process grants organizations the means to digitally review, validate, and pay payables. While some may mistakenly assume that manual accounts payable is cost-effective solution, the risks are far too great to outweigh the minimal cost savings gained.
Enterprises that fail to invest in accounts payable automation are subject to significant detriments. Primarily, manual accounts payable processes necessitate more human labor and processes, resulting in substantially higher overhead cost. For example, manual AP processes can require up to fifteen manual data entry points creating increased errors and redundancies resulting in higher costs per invoice.
As labor is one of the chief costs of manual AP processes, companies may face high rate of labor turnover thus creating potentially hazardous situation in terms of accuracy, compliance, and regulatory penalties. Without an automated AP solution, enterprises would be forced to employ AP staff to review and process accounts payable information. The disconnect between manual AP staff and systems can lead to mistakes and costly errors.
By failing to implement automated accounts payable processes, organizations are exposed to other risks, too. For example, manual AP processes can lead to unsatisfied vendors and late payments. Consequently, vendors may offer discounts for payment due dates that can benefit buyers. Organizations risk missing out on these discounts with manual AP process as it does not easily grant visibility to potential available discounts.
Finally, without an automated AP solution, organizations are exposed to greater risks when considering fraud and data breaches. When manual AP applications are used, lack of audit trails can make fraud investigations more challenging. Additionally, manual AP workflow processes require an excessive amount of human interaction thus leaving opportunities for malicious actors to exploit the system.
Organizations must recognize the implications of not using software for automated accounts payable. While the initial investment may seem too expensive, the risks posed by manual AP processes pale in comparison to the financial implications of reducing errors, misuse of funds, and labor turnovers. An automated AP solution offers cost savings, data security, and accuracy that only software application can provide.
