With many companies having manual accounts payable, there is bound to be inefficiencies and mistakes. It can be time-consuming and may hold companies back from reaching goals or growing in their industry.
With the growth of a business, you might be outgrowing your accounts payable. Here is how to know:
- Expanding globally – When companies are growing abroad, it can come with complications. Difficulties can arise in accounts payable when it comes to tax compliance and understanding which currency to use when paying vendors. Accounts payable must have a grasp on foreign regulations or else there could be issues with compliance.
- Higher headcount – Quick growth within a business means that there are going to be some growing pains along with it. AP may not be equipped for an increase in data. This puts the company’s efficiency and effectiveness at risk. Having an automated process can complete invoices five times faster than a manual process. This will increase efficiency and lessen the risk of error.
- Difficulty closing the books – Reconciling the books at the end of each reporting period can be a tedious task and invoices are having to be double-checked, accounted for, and realized for which ones have not been paid. With mistakes bound to happen along the way, and management wanting answers on their company’s financials, it is hard to get an accurate answer when information may be missing, or miscalculations may happen.
- Everything is manual – When a company has quick growth, AP is not at the forefront of concern because increasing revenue and growth in the company takes precedent. With AP being a manual process and the most time-consuming, it can cause a ripple effect of creating a lag in other departments. With the potential of automation to do the work for them, companies will be able to keep up with the increased demand that comes with growth.
- Delayed Payments – With books not being closed on time, it causes vendors and suppliers to wait which can jeopardize these relationships. Having a good relationship with vendors and suppliers is key to a successful business. Late payments can cause a stack-up of problems such as inaccurate reporting and a damaged reputation.
With advancements in technology, we can see improvements in efficiency and time management. With the ability of AP being automated, companies can better serve their clients and maintain positive relationships with vendors and suppliers. Adapting with the advancements in technology can also help advance a company into being more efficient. By utilizing technology and the efficiency it can bring, companies have the ability to grow and reach their full potential.