Have you noticed inefficiencies in your accounts payable (AP) department? It might be time for a change. Identifying signs like frequent errors, late payments, or audit challenges can highlight the need for automation. In this post, we’ll explore key indicators that signal it’s time to streamline your AP workflow and boost efficiency with automation.
1. Business Growth is on the Horizon
If your company is planning for growth, it’s smart to prepare your AP processes to scale alongside it. Manual AP workflows might work for smaller operations, but they can quickly become a bottleneck as invoice volumes increase. Automating AP processes now can position your existing team to handle an increased workload without the need to add headcount.
Automation can streamline invoice processing, reduce errors, and speed up approval times. It can also help provide better visibility into your cash flow, enabling smarter financial decisions as your business grows. By implementing automation early, you can avoid the growing pains that come with scaling manual processes, such as overburdened staff, delayed payments, or strained supplier relationships.
2. Payment and Invoice Processing Delays
If you start to notice an increasing number of payment and invoice processing delays, it may be because your AP team is having difficulty keeping up with the manual work involved. They may be taking too much time looking for information on paper documents and chasing down people to approve them. Not to mention the time involved with regular check runs.
Late payments can damage supplier relationships and lead to fees and lost discount opportunities. Automating your AP system helps improve slow, manual AP processes, streamline invoice approvals, and support timely payments. Automation can help your team mitigate delays and maintain strong, reliable partnerships with your suppliers.
3. Veteran AP Employee Nears Retirement
If your AP lead is nearing retirement, it may be a good time to consider automating your AP processes. Transitioning to automation gives you an opportunity to tap into their deep knowledge and expertise while setting up intelligent workflows and business rules that reflect your organization’s unique needs. By involving them in the process, you can help ensure the automation system is tailored for success, preserving valuable institutional knowledge before they leave.
Additionally, as younger employees – many of whom are digital natives – join your workforce, they’ll expect modern, efficient systems. Manual AP processes may feel outdated and cumbersome to them, while automation aligns with their preference for streamlined, digital workflows.
Investing in AP automation now not only makes the transition smoother when your team changes, but it can also position your company as forward-thinking and adaptable. You’ll retain operational consistency while appealing to the next generation of talent, ensuring long-term efficiency and scalability.
4. Audit Challenges
Accounts payable audits can be tedious and time-consuming. It’s not uncommon for an auditor to spend days at a company’s office searching through drawers overflowing with paper invoices. That mess of a process can be easier and quicker with AP automation. If your last audit did not go smoothly, it may be time to consider making a change.
AP automation can simplify audits by providing centralized, easily accessible records of all transactions. With traditional paper-based processes, tracking down invoices, approvals, and payment details can be time-consuming and error-prone. Automation can reduce this hassle by storing all documents digitally and linking them to corresponding workflows.
Auditors can have read-only access to your system, allowing them to view searchable audit trails, including timestamps, approval hierarchies, and payment histories. This transparency can not only accelerate the audit process but also reduce the risk of discrepancies or missing documentation. By adopting AP automation, your team can save time, promote compliance, and make audits a less stressful experience.
5. Your Organization Was the Victim of Attempted or Actual Fraud
Using paper for payments and invoices can put your organization at risk for fraud. Paper copies of sensitive information can be easily misplaced, altered, or destroyed. If you’ve already experienced fraud or an attempt, it’s time to consider a change.
According to the survey, “The State of B2B Payment Security in 2024,” conducted by AvidXchange and the Institute of Finance & Management (IOFM), check fraud is the most common method of payment fraud for businesses, with 30% of the AP leaders surveyed reporting that paper checks account for most of their organization’s financial losses. The survey found that 31% of AP departments have suffered financial losses due to check fraud, totaling between $50,000 and $1 million in total.
AP automation can enhance financial security by reducing reliance on paper checks. Digital payments use encrypted systems designed to provide greater protection against unauthorized access.
Automation also promotes tighter control over approvals and payment workflows, minimizing risks like duplicate payments or fraudulent transactions, further helping to safeguard your company’s finances.
Other Signs It’s Time to Automate Your AP Processes
Of course, these are not the only signs it may be time for your AP department to consider automation. Other red flags can include:
Too Many Duplicate Payments
Duplicate payments waste time and money. With AP automation, you can worry less about duplicating payments because the technology is designed to immediately recognize when a duplicate invoice is entered and flag it for review.
Employee Productivity Decreases
When you notice the AP team’s productivity decline, that’s a strong clue that something needs to be fixed. There’s a good chance employees feel buried in paperwork and inefficient processes.
In our 2024 Accounts Payable Career Satisfaction Survey AvidXchange and IOFM found that AP automation can boost employee satisfaction while streamlining processes.
Lack of Visibility
Manual AP processes often make it hard to track invoices and access timely data. AP automation is designed to solve this by centralizing records, providing detailed reporting, and offering insights into payment statuses and cash flow. Automation can help your business make informed financial decisions, improve cash flow management, and reduce late payments and related fees.
Ready to Automate?
Modernizing AP processes is important for businesses aiming to grow while keeping internal operations efficient. Whether it’s late payments, increasing invoice volumes, lack of visibility, or an impending team transition, there are many signs that it’s time to automate.
Trust your instincts; if your current system feels outdated or inefficient, it probably is. If you’re unsure where to start, our AP automation experts are here to guide you. Let’s work together to create a solution that fits your business needs and positions your team for success.