The Financial Cost Of Inadequate Accounts Payable Automation
AUTOMATE ACCOUNT PAYABLE
Having an effective accounts payable automation process is without question vital for business operations, particularly in the finance arena. By implementing software solutions, companies can mitigate many of the costs and risks associated with manual processes. The challenge is that without proper accounts payable automation software, companies face greater financial costs and risk of lost savings.
Many organizations still maintain manual accounts payable process when dealing with vendors, but this approach can lead to misallocations of funds, significant delays in payment, and the potential for heightened fraud opportunities. Manual accounts payable processes are more time-consuming than those enabled by an automated software system, and those time-savings can equate to considerable cost savings. By trial-and-error, organizations can sometimes identify areas of manual inefficiency, but inefficiencies can be difficult to pinpoint and it can take long time to make the necessary process changes.
Manual errors in payments can also lead to businesses incurring unnecessary costs. Small inaccuracies in manual transactions can easily go unnoticed, but still add up over time. With automated accounts payable systems, environmental variables like currency-conversion, human errors, and timing can be factored in and assessed against the overall financial goals of the organization.
Further, manual payments methods provide opportunities for fraud, which can cause considerable financial losses for businesses. Fraudulent activities are difficult to detect when manual processes are in place, and lack of trackability means that such activities may remain unknown for period of time. Automated accounts payable systems are designed to detect non-standardized behaviors and patterns, thus reducing the risk of fraud to organizations.
From financial risk standpoint, automated accounts payable software helps organizations manage their working capital better by streamlining vendor payments. This can significantly reduce the costs associated with late payments, which can potentially include financial penalties and missed discounts. Accuracy and consistency can also help organizations secure better vendor relationships and payment terms by ensuring accuracy and timeliness of payments. Organizations utilizing manual processes risk damages to existing vendor relationships and may even miss out on new opportunities with other vendors, both of which can cost the organization future revenue.
The long-term savings and protection of financial resources that come with automated accounts payable software solutions are substantial. Accumsy errors and fraud can easily add up to immense losses over time, and with an automated system, companies can save money, secure better terms with vendors, and reduce the amount of fraudulent activities occurring within the organization.
