5 Accounts Payable Automation Myths that Need Debunking
When it comes to finance, accounts payable is the most tedious task for many. But the idea of automating it doesn’t strike most of the small businesses. Small businesses concentrate mostly on customer engagement and marketing strategies and take accounts payable for granted thereby unconsciously increasing their workload.
The manual time-taking elements like data entry, invoice management and other tasks in the payable process can no longer consume your time when accounts payable automation comes into play. Having the right automation tools at your disposal, it is evident that you are not only saving your time but also getting rid of unnecessary errors. A new, good idea will be treated as an enemy by a conventional standpoint. The same way, small businesses don’t grasp the true perks of automating accounts payable and this article helps you debunk the myths that keep you away from automation.
What is Accounts Payable Automation?
If you want to automate rules-based payable tasks, your first option could be automating accounts payables. It works for you by receiving invoices, scanning them, extracting the necessary information from them and sending the invoices for approval and to process the payment. It lifts the burden off your shoulder, but you can monitor the process at any time.
The result of using this method will be error-free and rapidly payable. There is no way for you to get stuck anywhere in this process. Even if it does, you can find where the problem is within seconds.
Automating your accounts payable doesn’t mean that you hand over all the control of your payment process. You have the advantage of setting your own rules and payment protocols which the software should follow. You can choose payments that should be automated and payments that should be carried out with the click of a button.
Myth #1: Automation is reserved for big enterprises
The belief that automation is only for big enterprises is what stops the small business from growing faster. Automation not only refers to robots and big machines that perform difficult tasks. A simple software application that helps you get rid of manual labor is also automation. The size of your company has nothing to do with the decision of whether to automate the accounts payable or not. In addition to that, the main reason smaller companies should use automation is because they only have a limited human resource. And wasting most of that resource in data entry would not be a great idea. By bringing automation, you can use those employees Instead in areas where your company really needs attention.
Myth #2: Too costly to afford
Like any other software solutions, accounts payable automation is going to cost you an initial amount. But in the long term, automation will help you save a lot of money. Let’s see how. If you use manual keying, it is unavoidable that the reports will be prone to errors.
The average accuracy rate of manual keying is 96 to 98%. With the help of double-entry practices, it could be pushed up to 99%. But 100% accuracy is definitely impossible in manual data entry. These errors in accounts payable will make you pay more than what you actually had to pay.
Also, these errors will bring you penalties while tax filing. Overall, there will be a lot of loss on your side financially and psychologically. When you look long term, the return on investment with automation is really high.
Myth #3: Invoices will be completely hands-off
The biggest myth that is preventing small businesses from getting into automation is the fear of losing control. They think that the software completely takes over all the processes. But that’s not true. The software scans the supplier’s invoices with the help of optical character recognition and strips off the needed information from the invoices. Then it passes the invoices to a digital workflow that leads to payment processing.
Machine learning helps the software to recognize your payment approval patterns with the help of past experience. You will also be given the option to program the approval protocols which approve payments as per your instructions when you are away.
In simple terms, automation tools are built to be your truthful servant and not your boss. The decision making will still be under your control. Another big merit of using automated accounts payable is that you don’t have to rely on the finance team to find where the payment is stuck. You can track and make payments with just a few clicks.
Myth #4: Automation process is not secure
Of course, security is the first and foremost priority for any kind of business. You might have heard about cyber threats and its consequences on your company. Yes, hacking and data breaches are happening. But you might be misinformed, because chances of data breaches are higher in manual systems when compared to automated accounts payables. If someone wants to hack your records, it is easier for them when you use manual data entry.
Moreover, when you are giving all the control of accounts payables to one person, there are chances that the person might misplace a paper invoice or mistakenly send the mail to the wrong person. Data breaches will be unavoidable with human carelessness.
So in the case of security, technological protective measures will be more trustworthy. You will have an additional layer of security when you use an automated accounts payable system. They have built-in security walls and protocols. You can control user access and regulate who can access your payables. Overall, when it comes to security, automated accounts payable is better equipped than manual keying.
Myth #5: Automation Cuts Jobs
Most people think that automation will steal the jobs of many employees. Many small business owners consider this as a valid reason for not using automation. But that is not true. Automated accounts payable will take off repetitive tasks from your finance team. As a result, they will have the mind space to concentrate on improving the finance area overall.
You will definitely need their decisions and transferable skills for your firm. But when you use automation, their decision making ability could work without any tension, because they no longer need to spend their energies on tasks that anyone can do. Automating accounts payable will make the work easier for you and your employees thereby being the catalyst for exponential growth.
It’s time to make the switch
As a small business owner, you will surely have a lot of things to concentrate on. Why let some data entries occupy most of your mind space? Hope that all the myths about automated accounts payable will be cleared from your head now. Let the repetitive tasks be carried over by automation.
It is good for you if you choose automation as soon as possible, because what seems like a luxury now will one day become a necessity to survive in this business world. Some people who use software like QuickBooks also use third party automation tools like PayTraQer to sync their online payments into QuickBooks. From small to mid-level businesses, manual accounting processes are slowly fading out. There is no doubt that automation is very much loved for its error-free and lightning speed work. Make the decision today for the better future of your business.
