If you own a business, there’s a good chance you deal with accounts regularly. Whether it’s sending invoices, paying vendors, or collecting payments, handling these tasks can be time-consuming and frustrating. Even more so, if your business is growing and expanding, the more often you have to deal with new vendors and customers, the higher the probability that something will go wrong. The problem becomes even worse when your business multiplies. In this article, we’ll look at five of the biggest problems companies face if they don’t automate their accounts payable tasks.
1- Your Accounts Payable Process is Slow and Inefficient
Whether you’re dealing with accounts payable tasks manually doesn’t matter if they aren’t being handled efficiently. If it takes weeks to process an invoice and you have to chase payment more than once, the entire process will be slower and more costly.
2- You Struggle with Fraud
One of the big problems that businesses face when they don’t automate their accounts payable process is the risk of fraud. When dealing with manual processes, you must create a paper trail. This means that you have to keep paper records of all your transactions. If a vendor makes a mistake or changes their details, you might end up with a paper trail that doesn’t match up with the data on your system.
3- You Never Collect Payments from Prospects
When you don’t automate your accounts payable process, you’re likely only ever to collect a small percentage of payments from your prospects. Why? Because you’re dealing with manual processes. A high percentage of revenues will likely be lost or go uncollected if you don’t have a method to collect payments. This means you’re wasting time and money chasing payments you’re never going to get.
4- You’re Hiring a Lot of Staff to Manage Accounts
This is a sign that your company is growing too fast to keep up with the number of transactions that need to be handled. As your business expands and new employees are added, you will find they have many expenses to deal with. This means they will need to make purchases that must be paid for. As your business grows and expands, you will find that you’re facing a significant number of transactions. You will have a big problem if you don’t have staff to handle these.
5- Your Vendors Don’t Trust Your ability to Pay Them
Vendors will not be willing to work with you if they think you might not pay them. This could lead to your vendors deciding that it’s not worth the hassle of working with you, even if they want to continue doing business with you.
The longer you don’t automate your accounts payable process, the worse it will get. This is because you’ll miss out on many opportunities, and you’ll be spending a lot of time chasing payments that aren’t actually owing to you. Automating your accounts payable process will enhance compliance with all the changes that come with being an SME. It will also help you to stay in control of your cash flow and to collect payments that are actually due to you.