How Your Accounts Payable Team Can Ensure Business Continuity
Due to natural disasters, political issues, or the recent coronavirus pandemic- businesses that run processes that depend mainly on people are at risk of major disruptions. One such process operated in almost all organizations is Accounts Payable.
It has been observed that above 65% of organizations have business continuity plans in place, while 80% claimed that AP automation technology would prove to be helpful for business continuity needs. When any disaster occurs, large businesses that have invested heavily in process automation may be able to control the storm. However, many professionals at SMEs between one million dollars to three million dollars are faced with bigger challenges due to a lack of automation.
SMEs Lack of High Level of Accounts Payable Automation
Many companies have switched to accounts payable automation processes. But, a significant portion of SMEs are still lagging behind huge enterprises. For example, 90% of SMEs still receive paper invoices, whereas 85% use manual invoice data entry. It is specifically true for non-PO-based invoices, such as utilities, which are critical to continue operations but also present a cost-intensive and time-consuming approach.
Various Challenges of Manual AP Methods
1. Lack of granular insight
Incomplete and inappropriate data makes it challenging for companies to handle and understand their expenses and make crucial business decisions. It is impossible to track costs, much less minimize them with data, which is riddled with errors as well as inconsistent.
2. Inaccuracy
Entering data manually needs more employees, which can lead to high error rates during transposition and transcription.
3. High Expenses
The price to process an invoice manually is 13 dollars roughly, which is almost three times more than automation. Plus, the process carries additional expenses related to spotting and fixing errors. Also, 40% of AP leaders stated that the major bottlenecks in the AP methods are related to not receiving the invoice at all, or receiving it late, thus resulting in cut-offs and late fees.
What Happens with Automation?
Earlier, automation technology has been limited to large business enterprises. But today, with cloud-based accounts payable solution, technology is easily accessible to organizations of all sizes, offering an ideal way for SMEs to speed up the AP function.
By automating the accounts payable process and digitizing invoice data, SMEs can administer time and staff to focus on other essential business aspects, streamline methods, and boost the number of invoices processed per full-time staff by 95%. Also, they enhance workflow flexibility. Payment processing and approval routing can then be easily managed by staff remotely, anytime, and anywhere.
Besides automating approval methods and B2B payments, many solutions are required for automating and digitizing invoice collection. Manual data entry is considered as the major pain point in AP teams. Many AP software solution suppliers have established partnerships with organizations that provide advanced invoice capture technology.
Automation Enables Accounts Payable Continuity During a Crisis
When a crisis occurs, manual AP methods lead to costly delays due to the changing work environment as well as staff shortages. With several SMEs still relying on paper-based AP processes, handling business continuity will become more difficult, and operations may not be able to withstand sudden changes. For instance, invoices that are mailed to the workplace may be processed late during a crisis when staff needs to work remotely.
Technology plays a pivotal role in aiding organizations to maintain continuity. The advantages of automation go beyond cost savings. It supports the ability for businesses to continue back-office functions without any disruption. More than 70% of organizations believe that working from home would have a good impact on the finance department’s ability to process invoices, with only 35% stating that a few or all invoices would be paid late. Staying unequipped to continue business as usual results in the inability to take benefit of early payment discounts and even worse, service cut- offs, and late payments. For these organizations, automation is a must!
Ways SMEs Can Combat Business Continuity Challenges
- Generating a business continuity plan which involves plans of action for staff and workflow methods to keep business running smoothly during times of any uncertainty.
2. Utilizing service suppliers that can help with automated invoice capture and workflows and keep operations up.
3. Researching on various SaaS-based accounts payable platforms and automation tools, which allow teams to work remotely and maintain effectiveness.
Automation can support business continuity than processes, which involve human intervention in times of disruption. Back-office functions, such as AP, must be a top priority. Fortunately, organizations that implement automated accounts payable software solutions can manage operations remotely anytime, anywhere, using any smart device. As solutions are more widely available today, it’s an area that SME business professionals can and must explore.
