The decision to automate AP processes is a beneficial investment. However, there are still many companies (small to medium-sized businesses) that have not transitioned to AP software. Many small and medium businesses believe that owing to the size of the company, they will not reap the benefits of AP automation. There’s a lot to debunk related to this belief.
Learn about the benefits of AP automation (regardless of your business size) and continue reading!
The number of invoices processed per month by your company
If your business (regardless of size) is processing hundred or more invoices per month, then investing in AP automation software is a great decision. For companies processing 100 or more invoices per month, it’s easy to see the significant returns in the time saved and reduced costs with AP automation software.
So, the catch is for businesses that process less than a hundred invoices per month, and these businesses will not be able to experience immediate returns in terms of cost-saving and time.
The challenges faced and the solutions at hand
The benefits of automated AP processes for large and medium companies are pretty direct. The decision to invest in AP automation software is a straightforward “yes.” For companies that process less than a hundred invoices per month, to figure out whether investing in AP automation software is worthwhile, it’s best to look at the common challenges that get in the way of this decision:
SMEs (small to mid-market enterprises) usually use manual AP processes for invoice processing compared to larger companies. Research has indicated that approximately 86% of SMEs opt for manual AP processes. Manual processes cause SMEs to lose out on valuable time and money.
With automated AP processes like invoice automation, the time required to collect invoice data and other payment information and access the same gets significantly reduced. Automation helps to save more time by downloading invoices automatically from various sources. Moreover, digitalizing invoice processing and integration with third-party applications help to seamlessly send data across to other systems like ERP and make integration easy.
Another significant hurdle faced by SMEs is the limited availability of cash compared to large businesses. A crucial long-term advantage of investing in AP automation software for SMEs is the increased cash flow. Mistakes related to manual AP processing, frauds, late payments, and so on can be very expensive, and tight cash flow is a consequence.
Automated AP processes can significantly reduce the frequency of errors related to invoice processing. Not just that, early payment discounts and fraud mitigation are other advantages that will have a positive impact on cash flow.
Unfortunately, the limited cash flow coupled with manual AP processes makes SMEs very vulnerable to damages incurred by disasters such as the COVID-19 pandemic. Manual AP processing means that SME employees of the AP department have to process invoices from home manually. Manual processing is prone to more mistakes and is risky and slow. Credit card fraud and payment fraud occurrences have also risen during the pandemic.
Automated AP processes can avoid these risks and disadvantages
SMEs are heavily reliant on the capabilities of one or two employees who run the AP department through manual processing. It creates tremendous pressure on such AP specialists. The continuity of work gets jeopardized if these people fall sick or take a leave. With AP software, the continuity of employment gets ensured. Even if the concerned person is sick, the software can work.
These are the main ways SMEs can benefit from investing in AP automation software in the long run. Hope you are now ready to walk the automated way!
See the benefits of automated invoice management:
Better overview. Less accounting work. More time for your ideas.