Automation has taken over almost every area of business, including accounting. But not all businesses have fully automated. In fact, it can seem easier to simply continue with the status quo. But in doing so, you may be costing your company money and harming the business. Knowing when it’s time to take the leap, though, can be tough. Here are a few signs that it may be time to look at bringing technology into your business’s accounts payable processes.
Lack of Consistency and Control
Even the best manual processes won’t follow the exact same structure each time. You may write a check before getting the final approval, for instance. This can lead to problems, though, especially if skipped steps cause something to slip through the cracks. Software forces Step One to be completed before the next task can begin, avoiding these issues. You cannot have controls without consistency. Automation enables you to have business rules applied consistently to ensure internal controls are functioning.
Lack of Visibility
How much of your time is spent following up on invoices and payments? AP automation allows you to easily check the up-to-the-minute progress of any activity going through your accounting department. This saves your accounting team the time they would have otherwise spent tracking down the information. Additionally, without visibility, you cannot accurately accrue expenses. Automation provides you the visibility that you need to be informed.
Too Much Time is Consumed Processing Payables Invoice
Let’s face it: nobody enjoys processing accounts payable invoices. It’s a labor-intensive task that can consume hours of your time each month. Automation will make the process easier, as well as include a way for customers to GL code, approve, pay quickly and easily. This lets you and your team shift their efforts to more important responsibilities.
Invoice Approvals and Payments Take Forever
Waiting for the appropriate personnel to sign off on all the payables invoices so that they can paid takes time. It also requires plenty of effort, assuming you have to follow up multiple times. This means if you have vendors who offer early payment discounts and you miss the discounts due to approval delays you’ll end up costing your business money.
You See Repeat Errors
Manual processes are prone to human error. Eventually, someone will enter a wrong number, lose an invoice, duplicate an invoice or miss crediting an invoice that was paid. Even the occasional error can put your business at risk. At the very least, you’ll lose valuable employee hours fixing errors or money hiring third-party audit firms to recoup overpayments to vendors.
Employee Morale Drops
Manual processes can be mundane and exhausting, eventually causing employee burnout. Losing even one employee can impact your business’s bottom line since you’ll need to put time and effort into recruiting, hiring and training a replacement. Automation simplifies the process and gives your business the chance to let workers put their energies into higher-level activities that will prepare them for advancing in their careers.
You Aren’t Prepared for a Disaster
What would happen if an earthquake, tornado, or fire seriously damaged your physical office space? How much would be lost? AP automation means that if such a disaster strikes, your information is securely stored on cloud servers offsite, where it’s backed up on a regular basis. If you have a situation where your offices are uninhabitable, you can have everyone work from home or at a different site, with full business continuity.
Accounts payable automation is a great way to improve business processes and reduce cost. With the right solution in place, you can eliminate many of your current pain points, making life easier for both your team and your vendors.