Risks of Not Automating Accounts Payable

The decision to move to automating accounts payable with a software system is often weighed against its potential cost and convenience. It is important, though, to consider the potential risks of not switching to a software system. By not completing the transition from a paper-based system to an automated system, there are a myriad of risks that a Finance Executive should consider.

In terms of time and resources, manually processing invoice information is labor intensive. There is a high likelihood of human error, which can lead to significant delays and costs associated with retrospective fixing of information after the fact. By leveraging an automated system, this lagging time can easily be eliminated — as its automated nature allows for a seamless transition of information that is less prone to human error.

Data security and accuracy is another concern when using a paper-based system. The currency of accounts payable is data, so it is essential that all associated information is current and correct. With an automated system, data can be validated, updated and archived based on predetermined parameters. Without a software system, the risk of data loss due to keying errors or inefficiencies in audit trails is exponentially higher.

Since accounts payable are most often handled on a global scale, not leveraging a software system inherently means that working within multiple currencies, languages, and currencies is difficult, if not impossible. There is a high likelihood of errors and inaccurate calculations if this is not done in a succinct manner. With a software system streamlined for global operations, Finance Executives can ensure that payment strikes the right balance of accuracy, speed and compliance across a number of currencies.

Finally, using some form of modern accounts payable software allows Finance Executives to stay up to date with changing regulations and requirements. As fraud is a huge concern within accounts payable, modern software with reporting and analytics capabilities can help provide real-time insights into potential risks and provide more proactive awareness of potential compliance violations.

Automating accounts payable with a software system provides greater control over many of the associated risks. By taking into account the risks associated with a paper-based system, Finance Executives can take a proactive stance in mitigating the risks associated with accounts payable.