Accounts payable automation myths debunked
While the accounts payable department is often overlooked in many businesses, when it’s brought to the attention it comes with several myths that may further push back any efforts to automate its processes.
Accounts payable automation myths can be detrimental to your business, allowing you to settle for older manual systems that aren’t close to optimal.
There may be accounts payable automation myths that claim that automation isn’t actually as effective.
This is untrue. While it may be true that you won’t feel drastic increases in the efficiency of your accounts payable processes immediately after implementing automated systems, the effectiveness of these systems will be obvious over time.
Once you have a system that is fully integrated and functional, it will be obvious how much more effective your AP processing is with automation.
As an example, one invoice can take up to 3 days to process when your AP department is built on manual processes. When you have hundreds of invoices, this long turnover time can get overwhelming.
Not only that, but the longer it takes to process an invoice, the more costly it becomes. Some invoices can cost up to $25 to process. The inefficiencies that come with manual, paper-based processes are glaringly obvious when you look at the numbers.
When you adopt automation for your accounts payable, the increased efficiency will also be visible. You can reduce paperwork and manual data entry by up to 95%, which will in turn improve your employee productivity by up to 25%.
You can reduce the time spent on each invoice to less than one day with automation.
A lot of the reluctance surrounding accounts payable automation understandably comes from its initial costs. Considering that there are accounts payable automation myths surrounding the costs of implementing new systems, many small businesses aren’t open to the idea.
However, when you create an opportunity cost analysis and look at it long-term, you’ll realize that ultimately the benefits of automation will outweigh the costs. Over time, the initial costs will pay for themselves.
Once you have a platform or software properly set up, you’ll find that your accounts payable team will have a much easier time managing all their duties. In the long run, you’ll be avoiding manual data entry, time wasted on checking errors, and any fees that come with late payments.
When you factor in all these costs, it’ll be easy to see that accounts payable automation myths about it being too expensive for small businesses are not true. Instead, it can help your business scale by allowing your employees to spend more time focusing on analysis and developing new strategies.
Not only that, but when you establish a new and improved system early on, you also won’t have to worry about tackling big, complex, and messy AP processes when your business reaches new levels.
If someone says that you’ll lose control of your finances by automating your accounts payable, know that that’s one of the big accounts payable automation myths. In fact, you’ll have more control of your processes by automating.
Manual finance processes such as accounts payable are not only time-consuming but also difficult to maintain the accuracy of. No matter how careful your AP team is, errors, typos, and missing data may still occur from time to time.
When your AP staff is swamped with data entry, it’s even more likely that there will be overlooked errors. Automation is meant to be a tool that you can wield rather than an adversary that will wrestle control out of your hands.
Accounts payable automation can help you achieve better visibility, thus giving you better control. Accessing invoices, finding information, and even analyzing patterns in your data will be easier when you can enlist the help of an application or software.
When your staff isn’t busy with manual data entry, they can also focus more of their time to oversee the overall process. Having a more complete view of your accounts payable will net you better control of your desired outcomes.
It’s common for small businesses to think that it’s not yet time for them to adopt automation because they aren’t big enough.
One of the accounts payable automation myths that hinder small businesses from taking advantage of automation is that they think that only businesses with hundreds or thousands of invoices and payments to make can benefit from it.
But the truth is small businesses can benefit from accounts payable automation just as much as large businesses can. For one, when you have a smaller workforce, you want every employee to be as effective and productive as possible.
This will only be possible if they’re not bogged down by data entry. Accounts payable automation myths that say your business is too small for automation are proven wrong when you take a look at how much more a smaller pool of staff can accomplish without having to do data entry.
Conversely, big corporations and enterprises might think that given the scale of their businesses, they already have enough staff to take care of all their accounts payable.
But you can always shift your AP team’s focus toward analysis and forecasting to scale your business better instead of making them do manual administrative tasks. It’s also easy to believe that when you have a sizeable business, it’ll be complicated to get started on AP automation.
While it’s ideal to get an established automation system early, you can still get a fully functioning system incorporating accounts payable automation in just a few months.
Oftentimes, uploading data onto a computer feels like you have less control and security over it. You have to effectively trust your computer or software to protect your information.
It’s no surprise that there are accounts payable automation myths about how it’s unsafe for your business data. That’s not true. Trustworthy accounts payable automation software will always prioritize security.
From SSL encryptions, and two-factor authentication, to data backed up in remote servers, you can ensure that platforms that offer AP automation will safely store your data. You want to look for providers that have the appropriate ISO certification.
All the security measures put in place can easily debunk accounts payable automation myths related to a lack of security. In fact, there are more security risks that come with manual processes than automation.
You run into the risk of human errors when you do your accounts payable entirely manually. You rely on paper invoices and physical document files that could get misplaced. When that happens, it’s not likely that you’ll have a backup of your data.
With AP automation software, however, not only is your data stored securely in a remote server but you can also manage role-based access to ensure that only the right people have the appropriate information.
Accounts payable automation myths suggesting that automation won’t help you solve your AP challenges can be pretty convincing. But it’s important to not fall into that trap. Instead, you should consider how AP automation can be utilized to be the answer to your problems.
The reason why automation may not immediately seem like the right solution to some businesses’ AP challenges could be because their automated systems have not been implemented correctly.
If a business has accounts payable automation solution on hand but doesn’t take advantage of its automated approval workflow system, for example, then it’s hard to say that automation has cut down the time spent chasing approvers.
When you adopt an accounts payable automation platform or software, you should make use of everything that it offers you. Look at your current processes and pinpoint which of them can be automated.
Once you have a new and improved approach that seamlessly integrates with your automation tools, you’ll find that automation can save you a lot of time and money.
Considering that the majority of AP challenges are ultimately related to wasted time or efforts that can be redirected elsewhere, automating otherwise manual processes will more often than not be the answer to solving the issues that your accounts payable department is having.
After debunking these accounts payable automation myths, it’s safe to say that automation has more benefits than risks for your business. There’s no reason that you shouldn’t automate outdated, tedious manual processes when you can be saving time and money by automating.
In the long run, taking advantage of accounts payable automation will free up some time and money that can be used for more productive processes.
With the benefits of accounts payable automation made obvious, you should consider implementing software that enables AP automation. Volopay is one of the choices for a smooth and streamlined accounts payable process.
With features that enable you to automatically schedule payments for supplier invoices, robust reporting systems, automated approval workflows, and accounting integration, you’ll always be on top of your accounts payable.
Use your time, energy, and money to scale your business. Gain better visibility on your accounts payable processes and use that information to plan ahead for your business instead of wasting your time worrying about missing paper documents and data entry errors.