Amidst the pandemic and the sudden growth of tech use in business, companies across the world are automating their back office work. From cutting costs to getting faster results, an automated system can have a lot of advantages. One of the biggest areas of interest is the automation of Accounts Payable (AP) to avoid loss of funds and monetary discrepancies from human errors.
According to Business Insider, anautomated Accounts Payable process cuts costs by 81%.That is some big savings to push you towards automation.
Maybe your business is actually ready to take the first step towards automating your Accounts Payable system. But there are multiple pitfalls in the process that you might not be prepared for. These might actually turn out to be really costly mistakes when it comes to the future of your company.
7 mistakes you must know about while automating your Accounts Payable
7 mistakes you must know about while automating your Accounts Payable
What exactly are these pitfalls that can become grave mistakes? How do you know them and make plans to avoid them? Worried about the next steps? Read on to get a better grasp of the situation.
1. When you don't know your "must-haves"
1. When you don't know your "must-haves"
It is a great development that you plan to automate your accounting system. But do you have a list of what you actually want to gain out of an automated accounts system? If you do not know how an automated AP can benefit you, and you are starting it to get in trend. Then you are in for a real loss.
What to do about it?
What to do about it?
Make a detailed cross-departmental checklist. You need to highlight your goals from an automated AP. You also should know your “must-haves”, the features you want your automation system to have. This will help ease the way forward.
2. Not adding up the present cost and time used in manual AP
2. Not adding up the present cost and time used in manual AP
You must know what time, labor and money that was spent on manually doing your AP before you go into an automated solution. Why? This will help you understand what kind of software you need and the impact of automation on your ROI.
Guess what? Data says the US companies which have an automated AP save as much as 71% more on time.
What to do about it?
What to do about it?
Make a detailed study, cross-check all data internally. Understanding these will help you be at a point of advantage when you negotiate with an automation software provider.
3. Poor technology selection
3. Poor technology selection
Data says companies pay more than $9 per manual invoice and only $1.77 when AP is automated. But choosing the wrong technology solution for your business will leave you with a bad system and draining funds.
What to do about it?
What to do about it?
From the ease of use and also analysing to see if the automation software is compatible with other software in your system. You need a good selection of technology in project management to do this.
The KriyaGo accounting professionals have years of experience in this field. From the best technology selection and customisation for you to leveraging this for growth, we do it all.
4. Not planning the future needs of the software integration
4. Not planning the future needs of the software integration
If you spend money to integrate software into your system then its use is not just for today. Your future business plans will also bank on this. If you do not follow a proper work structure, you will never know what your business's actual needs are.
What to do about it?
What to do about it?
You must have the right roadmap for your business. Then only will you understand if your software is good enough to keep up with your business scaling plans. As your small business starts getting more clients, invoices and data is bound to increase, you must ensure that your automated system can handle that.
5. Not having all employees on board about automation plans
5. Not having all employees on board about automation plans
It is a major blunder to not have all stakeholders of the company agree to your automation plans. This is an inter-departmental system and their cooperation is crucial for a seamless operation.
What to do about it?
What to do about it?
Individually talk to all members and get valuable insights on your automation plans. Understand the needs of other departments that might indirectly help in bettering your AP process. Address their concerns directly and give them a detailed understanding of your plans.
6. Not red-flagging fake invoices
6. Not red-flagging fake invoices
It is a major mistake to get an automated AP system that doesn’t identify and alert you on fake transactions. Research believes that more than 50% of small businesses are at risk of getting fake invoices and eventually making extra payments.
What to do about it?
What to do about it?
Get your AP software vendor to make you understand their fraudulent invoice identifying process. If you get outsourced accounting services to automate your AP you can hold them accountable. You can even get it customised to fit your requirements.
7. No clear invoice screening and payment process
7. No clear invoice screening and payment process
Vendors and suppliers have innumerable ways to send invoices, from physical mails to handwritten sheets of paper and even e-invoices. Your automated system must have a screening and payment process for all kinds of invoices. Otherwise, you will be left with a jumbled system of doing half the work manually due to some incompetent software.
What to do about it?
What to do about it?
Plan out the invoicing system in your organisation. Either get all your vendors to sign up for e-invoices (which is almost impossible) or get a customised automated AP provider who will process all kinds of invoices.
Final Thoughts
Final Thoughts
More than 44% of businesses are now looking to automate their AP process. This will help them cut costs and save time. But you must know your needs and prospects inside out to make a sound purchase.
You can avoid these mistakes by getting outsourced accounting services from KriyaGo. Our team already has access to all the platforms you need, you can simply leverage the ones that work best for you to get your work done. Book a call with the expert consultants of KriyaGo. Talk to us today, help us help you grow your business by automating your Accounts Payable system.
