SMEs need to manage cashflow carefully however many are losing money due to inefficient invoice processing and manual accounts payable processes.
Losses can add up due to errors that creep in during manual data entry, while misplaced invoices or lengthy approval workflows can mean invoices are sometimes paid late or not at all. This can damage supplier relationships and make it impossible to leverage early payment discounts. In fact, SMEs could end up paying late payment fees, adding to their costs.
There is also the time it takes to manually manage invoices and approvals. Employees could be wasting hours of every day chasing down invoices, matching up purchase orders with invoices, getting managers to sign off on payments, and filing the invoices.
When that wasted time is added up, along with the actual costs of late or double payments, a business can work out how much they could actually be losing. Accounts payable (AP) automation can help SMEs streamline their processes and avoid these losses.
For many small businesses, the prospect of investing in an AP automation solution can be daunting. Concerns around how much a solution might cost or the knowledge required to manage it can mean many SME owners don’t even consider undertaking an AP automation software comparison.
Not only are AP solutions today affordable, even for small businesses, it takes very little in-house expertise to leverage AP automation solutions.
With AP automation SMEs can save money by:
- leveraging early-payment discounts to save money on invoices
- using payment patterns and reports to identify the most cost-effective suppliers and negotiate better deals for cost savings over the long term
- giving employees the ability to focus on value-adding activities rather than manual data entry and chasing down paper-based invoices
- saving office space by storing invoices electronically
- avoiding errors that creep in with manual processes and paying incorrect amounts
- easily identifying and flagging invoices that have already been processed removing unintentional double payments
- immediate visibility and tracking invoices at any time, seeing instantly which ones are paid and which ones are outstanding.
The right AP automation solution can help SMEs save money, manage supplier relationships more effectively, and maintain tighter control over cashflow.
Paul Fletcher, solutions specialist, Upstream Solutions
