Risks Of Not Using Accounts Payable Automation Software
CONVERTING ACCOUNTS PAYABLE TO PAPERLESS
Every organization has responsibility to reduce expenses and optimize resources. An effective accounts payable (AP) system is integral for cash flow optimization. While paper-based AP process often involves physical document movement, manual data entry, and paper audit trail, AP automation is modern solution that can help reduce manual effort and errors, and create efficiency and insight.
Eliminating paper-based manual processes from the accounts payable process can streamline operations, reduce costs, save time, and decrease risk. Effective accounts payable automation technology involves software that integrates AP processes with existing enterprise applications and back-end systems. Automating the AP process provides organizations with end-to-end visibility into the invoice initiation, approval, and payment process.
Yet, despite the benefits of automation, many organizations remain reluctant to migrate their AP processes to an automated system. Failure to adopt AP automation can lead to variety of risks, including high expenses and weak governance practices.
Inadequate DocumentationA paper-based system is difficult to track and transfers information in an arduous, manual process. It wastes time and resources because data needs to be manually entered into the system. Doing so increases the risk of errors and introduces lack of visibility.
High Processing Time and ExpensesAP processes are costly and time-consuming. Manually entering and managing paper invoices requiring tedious data entry a task that cannot be delegated to junior employee. This lack of process automation leads to inefficiencies and higher costs for AP processes, including invoice processing and archiving. Attaching invoices to payments and reconciling accounts is laborious and time-consuming.
Data Security ConcernsManaging paper trails may increase the risk of data security breaches and create potential fraud risks. AP automation software enables electronic data matching and verification of invoices, mitigating the risk of double-payments, errors, and fraud.
Ineffective Compliance ManagementWithout AP automation, organizations cannot rely on reliable audit trail or visibility into approvals or payments. This lack of control weakens and exposes organizations to legal liabilities as some regulations require proper document management and control.
Despite the benefits and cost savings of AP automation, organizations remain hesitant to make the switch. However, in todays ever-changing technological environment, organizations must adopt the latest automation technology to remain competitive in todays global business landscape. AP automation software can provide organizations with the security, visibility, and control necessary to manage AP processes more efficiently.
