Accounts Payable performance directly impacts working capital, supplier relations, borrowing costs, credit rating and even attractiveness to an investor. An accurate and effective Accounts Payable system opens doors to many opportunities and can readily optimize your financial performance.
However, most accounting departments fail to unlock the true potential of effective Account Payable. How can anyone do it when the majority of the time is eaten away in retrieving the lost invoice, correcting the mistakes, tracking payments and preventing theft?
Manual Accounts Payable – A Stumbling Block for Every Accounting System:
Data entry errors, slow processing, matching errors, invoice exceptions, double payments are the common AP problems faced by businesses of all sizes.
As a remote accounting firm specializing in Accounts Payable Services, we often hear from clients facing the above AP issues that are the root cause of lost capital and time. And guess how many of these businesses were relying on outdated paper-based invoice processing or manual AP process – all of them.
If you are one of them, you can quickly solve all the above AP problems by quickly automating your AP process. We know that this simple suggestion is barely enough to ensure stakeholder buy-in which is why we urge you to read this blog today. Here we provide 5 compelling reasons that make AP automation a must for your business.
5 Compelling Reasons to Automate Your Accounts Payable Operations:
1. Fast & Accurate Accounts Payable Process:Manual Accounts Payable is notorious for data entry errors, lost invoices and payment errors which automated AP comfortably eliminates. Automated data entry, streamlined process, approval cycles and increased visibility accelerates the processing of the invoice making it more accurate than ever.
Improved accuracy and accelerated invoice processing reduce the manual intervention needed, resulting in decreased headcount and overall investment. This improved accuracy and speed of invoice processing are responsible for a slew of benefits that follows.
2. Instant ROI:Manual checks, paper-based invoice processing, overhead costs and late payment fee are three common problems that lead to high cost per invoice processed.
Incorporating automated invoice processing alone is set to bring sweeping changes in the cost structure of AP. Reduced labor expenditure, mailing and printing overhead cost, eliminated late and interest fees resulting from swift automated invoice processing cuts down the cost per invoice. Add this to the fast and streamlined processes & improved visibility that enable AP resources to capture early payment discounts consistently – improved ROI seems a guarantee.
3. Improved Visibility & Control:Lack of visibility and control are primary reasons for manual AP being a ripe ground for fraudulent activities. The tedious and mundane manual AP process breaks down when the invoices arrive from multiple locations making it difficult to identify issues when they arise.
Automated AP identifies the most optimal route while providing greater visibility into the AP processes. “With AP, it is easy to identify late payments and reasons for such cases. Identifying AP issues becomes easier and so does resolving them no matter where ever your team resides”, says one of our Accounts Payable experts at Back Office Accountants.
4. Increased Security & Process Control:For a process that deals with a lot of sensitive financial information, manual accounts payable is not adequately protected in most cases. Without stringent processes, in place, sensitive data can easily slip through leading to fraudulent activities which are again difficult to detect in AP.
From controlling and limiting the authorized functions to enabling precise audit trails, optimized approval workflows and prompt flagging mechanisms, automated AP enables stringent security measures to eliminate the risk in AP.
5. Simplified scalability:From invoice processing to the payment process, automation is a streamlined and repeatable process that is simple to maintain with minimal interventions as compared to manual AP. while customizable rules make it tailor-made for your accounting system automation truly shines when it comes to scalability.
Minimizing manual processes give business freedom to scale as they go without suffering common resource bottlenecks or spending more money. Imagine accruing early pay incentives with blazing fast invoice processing and doing it consistently for a long time with minimal manual intervention – and that is what an accounting department can accomplish with automated accounts payable.
Thus automated AP is fast, accurate, and cost-efficient and provides a solid base for your AP team to make additional savings while paying for your invoices. More importantly, it is easily scalable help your business grow effortlessly without additional expenditure or manpower. However, all the above benefits are only possible if the automation is perfectly set up based on the requirements of the business. If you are a business looking to automate Accounts Payable our AP experts at Back Office Accountant will be happy to assist you.
That said, if you are a small and medium business that is not looking for an automation setup but want to leverage all the benefits of AP automation then you can consider outsourcing Accounts Payable to remote accounting firms like us at Back Office Accountants: https://www.backofficeaccountants.com/