There is a lot of unfounded fear of accounts payable automation. It basically comes down to what automation will do to my job (accountant) and what it will do to the current accounting system (company). In this post, we’re looking at grim accountant fears of AP automation.
Ever since the 1964 Twilight Zone episode, The Brain Center at Whipple’s where robots completely take over everyone’s jobs, people have been afraid of automation. We’re a long way off from that. Right now, technology still needs to be run by humans. AP automation doesn’t take over the payables process. It makes it more efficient.
Fear: My boss will replace me if we automate.
Consider the tedious manual AP process that takes days or even weeks if your company has a sizable number of suppliers – we’re looking at you hospitality, property management, and media.
You’re responsible for sending out payments. But first, checks have to be printed and routed for signature. Then there’s the fun of stuffing envelopes and applying postage. Once checks are safely in the mail, the truth is, they may not be that safe.
Most check fraud starts with removing checks from mailboxes. Mail is often slow and subject to natural disasters and the occasional delivery to the wrong address. Now the payment is late, or worse, in someone else’s hands. The supplier is calling, late fees are issued – again, and the original payment may need to be canceled and reissued. This process could take weeks. By the time it’s done, it’s time to make the next month’s payments.
Reality: AP automation helps to make you invaluable.
With AP automation, there’s no manual check writing or physically routing for signatures. The approval is done with a click instead of sitting on someone’s desk for days. Errors (if there are any) are easier to detect before payments go out, suppliers receive payments faster, and the whole process goes from weeks to days or even hours.
More importantly, you, the accountant, now have time to focus on strategy, planning, and improving supplier relations. And with just a glance at the dashboard, you’ll have a more intuitive understanding of how the business is doing financially. You won’t need to grapple with excel configurations every time your boss needs answers.
Fear: I don’t want to learn a new program. I’m an expert in our legacy system. Besides, I like my excel sheets.
Let’s start with the Excel sheets. Excel is easy to use, and formulas and other shortcuts make it feel very cutting-edge. But it’s not the 90s anymore. And Excel sheets can do little to move the actual payments process along.
Yes, you can import data from various company departments. But setting the formulas, line-by-line review of the data, and updates are all manual processes. An error at any one of these steps can throw off the outcome and result in having to repeat the process. Manual processes have a higher rate of mistakes, costing time, late fees, and unhappy suppliers.
Excel is excellent for verifying which payments need to be made, creating sortable data presentations, and calculating expenses, savings, and fees. But you can’t make payments from Excel. The result is spending a lot of time working out the details in one system and acting on the details in another. Excel is an impressive reporting tool. It is not a payment tool.
Regarding the legacy system that you’re comfortable with, how much longer will it be effective before it needs to be upgraded or replaced? Legacy systems work well at first, but they are limited when it comes to scalability and modernization. They do not play well with newer tech, and their inability to update means they pose a security risk.
Reality: AP automation increases efficiency and reduces costs by up to 80%.
AP automation software can integrate with your ERP or accounting system to make payments from a single dashboard or platform. It may even be able to connect with your legacy system. And AP automation tools can also generate reports. It removes tedious manual processes and avoidable errors. Automation is faster and more secure. Less late payments equal fewer late fees and more early pay discounts.
Something else to consider about legacy systems, they chase away prospective skilled talent. A new accountant will not want to learn an old program or system. It limits their potential as much as it limits your business’s ability to scale. Learning a new automated payment process is not as hard as it may seem.
AP automation integrates with your current system, so you’re already working in familiar territory. It would be easier to update, which maintains security. You’ll have better control and visibility into payments. And you won’t have to go to the office and unlock your cabinet to access payment information.
Fear: The accounting ledger is locked away and only I have the key. A new system will give everyone access. That’s a security risk.
Honest payment mistakes cost companies time and money to correct when they are identified. But it is more challenging to determine the difference between simple mistakes and internal fraud. So no one can blame you for locking up your ledgers and other materials. But that doesn’t mean it’s safe or will prevent someone from committing internal fraud.
If fraud is someone’s goal and you only have a physical paper trail, which is easy enough to manipulate, then it’s your word against theirs. It could be a case of duplicate payments, kickback schemes, personal expenses charged to the company, or fake vendors.
First, you would have to identify where the fraud began and how it was conducted. Then you’d have to figure out who was behind it. And your job could depend on getting this type of investigation right. Because accusing the wrong person or failing to determine how the fraud was committed could point to you, the holder of the ledger, as the problem.
Reality: With AP Automation, more access is not a bad thing.
If you’re the sole person responsible for making payments, then there’s only one set of eyes on the process. And that actually makes you more vulnerable.
AP automation means more people will have access, but once the CFO assigns authorizations, there will be more controls. Not everyone that can log on to the platform will have the same permissions. But it will allow more visibility into the payment process, making it easier to spot inconsistencies or fraudulent activities.
An automated workflow approval process will run smoothly without all the paperwork. AP automation also helps prevent external fraud. Suppliers are validated, preventing false accounts from being set up for payments. Internal purchases can be monitored to avoid overbuying. Someone else can handle payments when you’re out of the office. And the entire process can be done remotely. No one will have to go into the office and unlock your cabinet to make payments.
New technology can be scary at first, but there is no need to be afraid automation. Processing payments without accounts payable automation? That’s something to fear.
Corporate Spending Innovations (CSI) is a global FinTech leader providing innovative payment solutions to world-leading brands across all industries. CSI automates and digitizes B2B payments with a safe and highly secure cloud-based payments platform. For a more efficient way to manage payables, including virtual credit card, B2B Payments Network, ACH, and check, book a demo here.
CSI is a an Edenred Company, the global leader in payment solutions for the working world.