The Hidden Costs Of Manual Accounts Payable Management
BUSINESS ACCOUNTS PAYABLE
When it comes to cost containment, accounting operations and C-level executives are increasingly recognizing the value of using accounts payable automation software. Without the proper technology in place, companies can face an array of real risks and hidden costs. Here, we focus on the most important considerations when it comes to managing accounts payable without the help of software.
For management teams that are opposed to or otherwise reluctant to invest in automation software for accounts payable, manual management of records and transactions is seemingly basic answer. However, there are long-term risks associated with largely paper-based solution. Ultimately, manual accounts payable processes are labor-intensive and inefficient, lacking the controls associated with software-based accounts payable management.
From logistical and workflow standpoint, manual accounts payable processes ultimately increase the time it takes to complete transactions, limiting companies ability to capitalize on early payment discounts. Furthermore, the chances for human error rise with manual intervention, reducing accuracy, decreasing accuracy and potentially leading to audit risk. In comparison, accounts payable automation software increases efficiency, helps to streamline business processes, and can potentially help to reduce the costs associated with manual accounts payable operations.
Most manual accounts payable operations require third-party with administrative knowledge and expertise to ensure accuracy and compliance, with additional costs associated with the labor involved. Additionally, any disruptions to the manual process can lead to lost invoices, poor data entry, and longer turnaround times when it comes to payments. Reviewing and verifying the accuracy of data entry is labor-intensive, increasing the costs and risks associated with manual accounts payable and serving to further highlight the value of accounts payable automation software.
Similarly, manual accounts payable processes require sheets of paper for invoices and supporting documents, with additional costs incurred in supplying staff with office supplies. Though the costs may appear insignificant on per-invoice basis, these additional costs can add up quickly over time. Documentation and records management are arguably the most time-consuming components of manual management, consuming information technology and accounting resources that could otherwise be allocated towards more core operations and business objectives.
Accounts payable automation software is not just luxury; it is now necessary component of modern accounting operation. The endless cycle of manually processing invoices and verifying payments can be avoided by turning to automation to eliminate much of the tedium and add an additional layer of financial security. Accounts payable software offers streamlined and secure transaction management, eliminating the need for manual processes and the risks associated with them.
