The Risk Of Not Implementing Cloud AP Automation Software
CLOUD AP AUTOMATION
Oversight of accounts payable (AP) processes has traditionally been integral to the success of organizations and their ability to ensure accuracy and financial control. However, with the widespread adoption of cloud-based technology and the impacts of the pandemic, maximizing efficiency and reducing manual steps in AP processes is becoming increasingly critical.
In order to keep up with such changes, organizations must consider their cloud AP automation options to remain competitive. Failure to employ the software necessary for leveraging cloud-based functionality can introduce substantial risk factors for an organization. These risks can be divided into three categories: operational, financial and strategic risks.
Operational risk factors associated with not utilizing cloud AP automation software include applying incorrect payments, duplicate payments, inaccurately tracked spend, limited supplier visibility, and manual errors. Manual methods of providing or auditing information can be costly in terms of both time and resources. This can ultimately result in higher risk of incurring penalties, additional auditing costs, and handling supplier negotiations.
In terms of financial risk, lack of cloud software automation affects an organizations ability to maintain accurate records and prevent fraud. Not leveraging automation capabilities can create greater difficulties in tracking the bottom line, and make it difficult to get the necessary information for Board and Audit meetings. Furthermore, not having an automated AP system makes it difficult to comply with local country and U.S. federal tax code requirements, immensely increasing financial penalties.
Finally, lack of software automation in cloud AP applications can have serious strategic implications. Companies, who have access to automated payment information, can create important long-term relationships with suppliers through improved visibility and supply chain optimization. This is beneficial due to the role of suppliers in driving the innovation and cost-efficiency of company. Furthermore, without proper software automation, it is difficult for company to gain visibility into historical trends, detect fraud, identify changes in industry regulations, and thus, be able to react accordingly.
By investing in cloud-based AP automation software and related services, organizations can reduce the risk associated with manual methods of AP processing. The automation of cloud-based applications is essential for financial transparency and strategic decision making in the 21st century digital economy. Through the automation of these applications, organizations can ensure the accuracy of their financial data and have the insights necessary for achieving long-term success.
