October has just begun, and Halloween is right around the corner. It's the spookiest month of the year...but for many finance teams, manual business processes haunt their productivity year-round.
By wreaking havoc on efficiency, throwing a wrench into forecasting efforts, and casting a dark cloud over workplace morale, manual processes lurk at every corner of your business and ultimately threaten your bottom line.
Read on to uncover the frightening realities of manual processes. We'll reveal how they disrupt every level of an organization and, most importantly, how enterprise automation can help your business banish them for good.
Table of Contents:
Fears for Finance Teams
-
Late Vendor Payments
-
Difficulty Preparing for Audits
-
Approval Bottlenecks
-
Inaccurate or Desynchronized Data
Fears for Finance Executives
-
Employee Turnover
-
Lack of Visibility Into Departmental Expenses
-
Overlooked Contract Renewals and Price Increases
-
Fraud and Compliance Issues
Fears for Finance Teams
Throughout the year, accounting teams grapple with workplace challenges in the absence of automation. Let’s explore some of the major concerns that haunt finance teams and how accounting automation comes to their rescue.
1. Late Vendor Payments
The Fear:
Late payments are a nightmare for accounts payable teams. They can lead to missed discount opportunities, unexpected late fees, and even damage to vendor relationships.
Ultimately, the AP department must answer for these setbacks: but manual processes are often the real culprit to blame.
It's time-consuming to pull an aging report, manually validate invoices one-by-one, and cut checks to mail to your vendors. At the end of the day, there’s a limit to what the AP team can do to ensure payments are made on time when everything has to be done by hand.
How Automation Helps:
AP automation software alleviates unsettling concerns surrounding late payments. Streamlined accounts payable processes offer significant advantages, such as:
- Enhanced Visibility: Centralizing invoice and payment data empowers AP teams to proactively monitor due dates and identify bottlenecks, mitigating late payment risks and fees.
- More Efficient Processing: Top-tier AP software automates 2- and 3-way match validation. This ensures seamless invoice processing from receipt to vendor payment, which increases the chances of early payments and associated discounts.
- Improved Vendor Relationships: Consistently making on-time payments fosters positive vendor relationships, enhancing the potential for favorable terms and access to special pricing.
Automation liberates AP teams from late payment anxieties, enabling them to take on a strategic role focused on securing discounts and nurturing vendor relationships.
2. Difficulty Preparing for or Passing Audits
The Fear:
As audit season creeps in, the stress of gathering payment records looms for teams that lack the convenience and accessibility of a centralized document repository.
This chaos stems from manual processes.
When records are dispersed among various digital platforms and physical filing cabinets, the risk of misplacement and damage to important documents rises significantly.
As a result, AP teams are tasked with hunting down essential records, and often find themselves haunted by the threat of audit failure.
How Automation Helps:
A centralized document repository is a crucial tool for finance teams, especially during audit preparations.
Document management software simplifies record-keeping with customizable indexing, along with a version history of record access and edits. This helps AP teams provide full, detailed information to their auditors without any of the headache associated with finding and organizing invoices, receipts, and payment details manually.
3. Approval Bottlenecks
The Fear:
Accounting teams often take the fall for late payments–even when bottlenecks in other departments are preventing their ability to process payments.
This is a nightmare many accounts payable specialists can relate to: having to take the blame for being the problem child when you're doing all you can to get payments out the door.
How Automation Helps:
Keeping a record of invoice activity at every step helps teams track approvals and allows managers to see and rectify bottlenecks where they are occurring.
Digitizing the approval process also helps things run more smoothly. With accounts payable automation, approvers are notified when they have an invoice, expense report, or other document ready for review–and they're able to do so right from their email inbox.
The added efficiencies of AP automation greatly expedite the approval process. In fact, a report from PYMNTS.com found that automation reduced invoice processing times by an average of 16 days.
Using automation to remove the concealed drawbacks of outdated processes leads to more efficient approvals. This, in turn, paves the way for a seamless journey from receiving invoices to making vendor payments, free from any disruptions along the path.
4. Inaccurate or Desynchronized Data
The Fear:
The scary truth about manually entering data into different systems is that it vastly increases the risk of inaccuracies. Research suggests that manual entry errors can range from 18-40%.
A high margin of human error can lead to a host of issues among finance teams, from duplicate payments to poor visibility into budgets and cash flows–all of which negatively impact the business and cause additional stress for the accounts payable department.
How Automation Helps:
Optical Character Recognition (OCR) technology powered by AI offers a practical solution for capturing data quickly and accurately up front.
As the AI is used, it learns how to find and extract data on invoices. It becomes more and more accurate over time, which reduces the risk of financial errors due to typos.
It may sound scary rely on the accuracy automated data capture, but top-tier automation solutions offer to train the AI and handle any of its mistakes on your behalf. This includes validating your invoice data with an astounding accuracy rate of up to 99.99%.
Lastly, AP automation solutions integrate with your existing ERP system to ensure data flows seamlessly between platforms. This further enhances data accuracy by eliminating the need for AP teams to duplicate data entry across disparate systems.
Fears for Finance Executives
CFOs aren’t immune to the threats of manual processes, either. Here are the four biggest problems finance executives face with outdated methods, and how automation provides a powerful cure for process inefficiency.
1. Employee Turnover
The Fear:
It's harder than ever for AP leaders to find top talent today, especially as the accounting profession has been characterized by historically low pay, menial tasks, and outdated processes.
One scary statistic from Accounting Today reports that, "The number of accounting graduates has been decreasing 1 to 2% a year for the last 15 years."
Furthermore, many in the Baby Boomer generation are nearing retirement age. As they exit the workforce, they take years of experience and inherent knowledge with them, making them exceedingly difficult to replace.
How AP Automation Helps:
Younger generations entering the workforce prioritize efficiency and technology.
They seek companies that empower them to take on more strategic roles, and AP automation aligns with these expectations by automating tasks and freeing up time for more strategic and impactful work.
This is key for organizations who wish to attract and retain the newest generations in the AP talent network.
Additionally, automation standardizes processes, safeguarding against the chilling reality that experienced employees take valuable tribal knowledge with them when they leave.
Digitizing consistent processes not only ensures efficiency but also supports business growth by providing a clear roadmap for scaling operations.
2. Lack of Visibility Into Departmental Expenses
The Fear:
In the absence of an efficient way to monitor payment trends in various departments, finance executives may feel like they're left in the dark when it comes to spending activities across the organization.
When payment data is scattered across multiple platforms, it becomes difficult to gain a holistic view of where expenses are occurring.
As a result, finance leaders often have no choice but to adopt a reactive approach, which usually happens at a point in the budgeting season when it's far more challenging to address the creeping rise of expenses.
How Automation Helps:
Automation offers CFOs access to real-time data and historical trends, which enables them to achieve higher forecasting accuracy.
As a result, they are empowered to make more data-driven financial decisions, to align budgets with actual expenses, and to avoid any "jump scares” that may arise due to limited visibility into departmental spend.
3. Overlooked Contract Renewals and Price Increases
The Fear:
In the realm of offline or manual processes, it's much simpler to overlook subtle vendor price hikes or to miss an automated contract renewal you meant to cancel.
These unexpected expenses have the potential to overshadow the budget. While each one might appear harmless on its own, repeated occurrences can eat into projected profits and obscure certain financial realities within the cash flow.
How Automation Helps:
AP automation with integrated data reporting centralizes all payment and expense data in one accessible platform.
With all payment activities recorded in a single place, finance leaders can easily track contract renewal dates and monitor vendor pricing trends, providing valuable insights for strategic budgeting and planning.
With this information, CFOs can more accurately align budgets with anticipated expenses, and make informed decisions to prevent unexpected losses.
4. Fraud and Compliance Issues
The Fear:
Failing to adhere to security compliance standards can have severe consequences, including legal actions, damage to reputation, and financial expenses.
The alarming specter of cybercrime is on the rise and is projected to reach a staggering $8 trillion by 2023.
This poses a significant and growing threat to businesses of all sizes.
How Automation Helps:
Enterprise workflow automation plays a crucial role in ensuring that a company complies with various security standards including SOC1, SOC 2, SOX, HIPAA, FIPS 140-20, PCI, CJIS, ITAR, and Safe Harbor.
Furthermore, automation solutions for finance teams provide executives with a clear view of their cash flow, allowing them to spot potentially fraudulent or suspicious spending habits.
By keeping an eye on financial actions in real-time and maintaining a secure environment, AP automation serves as a proactive defense against cyber threats and regulatory violations.
Face Your Fears With Automation
We all love a good "slasher" flick–but our favorite slasher is a business process automation solution that can cut through lengthy approval cycles and unnecessary business expenses.
The horrors of manual processes in the finance department are real, but automation software can be the solution that brings efficiency, accuracy, and peace of mind to your business.
Don't let manual processes haunt your organization – schedule a demo today and learn how you can embrace the power of automation to banish these financial fears for good!
