Accounts Payable Automation: A Quantitative Analysis Of The Potential Risk From Software Avoidance
Define Accounts Payable
Companies have long been utilizing automated accounts payable systems to streamline their billing cycle and cut costs, while providing enhanced insights into their financial operations. However, due to the recent economic downturn, there are still significant number of business eschewing software integration and still utilizing manual processes. Some organizations may be skeptical of software implementation due to its associated implementation costs, while others may view it as too complex to enable their necessary operations. Regardless of the underlying cause for this reluctancy, it is important for finance executives to understand the potential risks associated with foregoing automation software.
business without an automated accounts payable system are subject to myriad of issues, from incorrect or even duplicated payments to increased audit risk. These potential risks can lead to elevated costs related to rework or costly fines for error-prone processes. Additionally, without Softwaresolution, business are typically unable to track the full lifecycle of an invoice from the initial entry to its eventual payment, leading to further complications in terms of understanding their financials.
Perhaps the most pertinent downside to using manual accounts payable process is the associated time-investment. Executing an automated solution may require time and resource up front, while still performing manual tasks like payment reconciliations can result in an ongoing burden on the company. This could include factors such as having employeemanually calculate discounts, missed out on early-payment discounts if the payment is not completed in timely manner, or even dealing with delayed payments due to the manual effort required prior to transmitting the details.
Advanced accounts payable automation systems provide the extra layer of assurance necessary to keeping business on the cutting edge when dealing with their financials, including features such as dynamic discounting, fraud detection, and even payment control compliance monitoring. Furthermore, by deploying such solution, business can eliminate manual data entry, reduce the potential for human errors, and also eliminate the chance for missed payments or accounting discrepancies.
Utilizing technology to ensure accounts payable accuracy and security should be priority for finance executives, and failure to integrate Softwaresolution could prove to be costly mistake. Automating the accounts payable process can provide companies with the tools and insights necessary to maximize profitability and remain competitive in todays fluctuating market. It is therefore essential that executives understand the advantages of implementing such system in order to avoid costly pitfalls, which can greatly impair financial performance.
