How Accounts Payable Departments Ensure Business Continuity During Ongoing Pandemic?
The COVID-19 pandemic has affected almost every business in some way or the other. It has made digital processes mandatory in every department of the company. Especially the accounts payable process automation is vital to ensure sufficient cash flow into the business.
According to research, only a few big organizations have the capabilities and infrastructure to support online accounts payable processes, while startups and SMEs have yet to consider investing in AP automation solutions.
Even though many SMEs adopted automated technologies, most of them are lagging behind large enterprises. This is because they go for automation in only a few operations. For instance, around 90% of the SMEs still receive paper invoices, and 80% enter invoice data manually, which is time-consuming and error prone. Although paperless invoicing is becoming mainstream, most businesses still receive more than 60% of invoices manually. Most non-PO-based invoices, such as utility bills, will be usually received in paper and entered manually into the system.
Drawbacks Of Manual Accounts Payable Processes
Adopting automation in the AP department is vital for every business to sustain in today’s competitive world. And during this pandemic driven WFH environment lack of automation can negatively impact the organization’s productivity.
Data Inaccuracy
In manual processes, the AP teams need to collect the paper invoices and manually enter the invoice data into the system. While managing bundles of paper invoices, employees may sometimes record inaccurate information on the system, which may result in the business paying higher amounts to the vendors. Plus, searching for a specific paper invoice is very difficult, and recreating the lost invoices may sometimes be impossible.
Lack of Visibility
Enterprises should access accurate data to ensure every process is happening correctly and make result-driven business decisions. With inaccurate and incomplete data, it would be difficult for businesses to get clear visibility into the system and monitoring costs.
High Costs
Many people think implementing automation is costlier and still relies on manual processes. But the cost of manual processes is more than automation in the long run. On average, it would cost $14-$15 for manual processing, which is 2-3 times more than automated invoice processes. Plus, there will be additional costs related to identifying and fixing errors.
AP Automation Ensures Business Continuity and Enhances Productivity
Maintaining business continuity is challenging during the COVID-19 pandemic due to the changing work environments and staff shortages. Enterprises that are still dependent on manual, paper-based processes may not be able to withstand the sudden disruptions in the business processes. For instance, paper invoices that are usually mailed to the office address may be processed late during this WFM environment where employees are forced to work remotely. However, AP automation technology allows businesses to manage critical back-office functions without any disruptions.
Accounts payable solutions such as SutiAP allow automating the entire process of AP – invoice capture, matching, approval, and payments. Approval routing and payment processing can then be managed by employees remotely, anytime, anywhere. By digitizing invoice data and automating AP processes, enterprises can allow their workforce to focus on other aspects of the business, thus, significantly improving the company’s productivity.
Implementing automation will save you from costly errors that may get resulted from manual calculations and processes and enhance accuracy. It will help you keep all the crucial accounts payable data and invoices accurately, verify it with the POs with automated invoice matching processes and make payments on time. Good communications and timely payments enhance your relationships with vendors and also helps you get early payment discounts.
