5 Accounts Payable Automation Myths that Need Debunking

Most finance executives feel accounts payable as the single most time-taking task in finance. But it is the last thing that small businesses would think of when it comes to automation. Small businesses often take accounts payable for granted and leave it aside, keeping other business tasks like customer engagement and marketing strategies at the fore. In reality, accounts payable automation plays a pivotal role in small business accounting.

Accounts payable automation removes the manual elements such as data entry, invoice management and related tasks in the payable process. With the right tools at hand, you can not only speed up the entire accounts payable process but also can save yourself from costly errors. But small businesses often overlook the idea of automating accounts payable and there are some myths that are debunked in this article. 

Let us decode the mythos related to the account payable automation

Decoded: Accounts Payable Automation Related Myths

Myth #1:  Automation is reserved for big enterprises

Most small businesses think that automation is something for big enterprises and so takes the back seat. 

If that is the case, you must be thinking about human-like robots and giant machinery when you hear the word automation. But automation is no more robots, it can be a simple software solution that eliminates manual labour from your workflow. The unpinning reason behind the hesitance is the inability to change the mindset related to the accounts payable automation, because that is how you have been doing business for years. 

The truth: The size of the company does not matter factor in the decision whether to opt for account payable automation or not, your needs do. Smaller companies usually have limited employee resources. Instead of assigning such grunt work to your team, you can task them with more strategic work that involves their presence.

Myth #2:  Too costly to afford

Accounts payable automation is, of course, going to cost you an initial platform cost like any other software solution. However vigilantly performed, manual keying inevitably has room for errors. It is generally held that the average accuracy rate of manual keying is 96 to 98%. You can push it to 99% using double-entry practices and so. 

Anyway, attaining 100% accuracy all the time in manual keying is impossible. Errors in accounts payable may lead you to pay more than what you have to pay. This may also pull up big chunks of penalty when taxes are filed with erroneous records and it has a direct impact on your line of credit.

The truth: Taking all these into consideration, your small business will best stand to the long-term benefits of return on investment with this. You can’t get a reliable solution without spending a dime. on an account payable automation process.

Myth #3:  Invoices will be completely hands-off

Some small businesses have a misconception that automation tools completely take over our process, resulting in loss of control. An automation software scans the supplier’s invoices using optical character recognition and strips off the required information from the invoices. It then passes the invoices to a digital workflow that leads to payment processing. 

Account payable automation can even recognise your payment approval patterns based on past experience by machine learning. You may also pre-set the approval protocols that approve payments according to your instructions while you are away or approve the payments with a mouse click. 

The truth: Automation tools are indeed built to ease your work, not to take your control. You will still be the boss, the accounts payable automation tool will not replace your decisions. The biggest advantage of opting for the account payable automation is that there is no need to chase the finance team to find where the payment is stuck. You can always track the status and move payments without any friction. 

Myth #4: There are too many security risks

You might have probably heard cyber breach news stories a lot in the net. You might have been alarmed by the bells and whistles of cyber threats. Security is the top priority for any business, regardless of the size and niche of the business. 

Hacking and data breaches do occur, there is no one denying that. But the chances for data breaches are more in manual systems than in  account payable automation systems. When it is done manually, it is easy for anyone to snatch the records and extract the data from them. 

If you are relying on one person to take care of your accounts payables and related security, there are chances that the person may misplace a paper invoice or mistakenly send mail to the wrong person. Data breaches can anyway happen, with lethargy and complacency. 

The truth: In fact, it is the other way around. Technological security measures are more reliable than manual practices. If you have an accounts payable automation system, you are adding an additional layer of security to your payables. Automation systems have built-in security walls and protocols. You can limit user access and regulate who can access your payables and how far they can access your payables. All in all, you can heighten your payables security with account payable automation.

Myth #5: Automation Cuts Jobs

As a small business owner, considering the future of your employees when you are about to take the call of automation is a great thing. But do you think accounts payable automation can completely replace your finance team? 

The truth: Absolutely not! Automation will rather improve their productivity, by taking off repetitive tasks from their workflow. It frees them up with clear headspace to work on things that need their presence, instead of wasting time on grunt and low-value tasks. You will, of course, need their decisions and transferable skills for your business. Automation can never outweigh human presence in business. It makes your team do the work smarter, not harder!

It’s time to make the switch

Hope all your misconceptions on automated accounts payable are debunked now. When you have so many things to do as a small business owner, why not pass on such repetitive tasks to automation systems and focus on business matters that really need your attention?

Automation might be a choice today, but soon is going to be a necessity. Even people who are using accounting software like QuickBooks, use third party automation tools like PayTraQer to sync their online payments into QuickBooks. Manual processes are slowly fading out of existence in small to mid-level businesses and getting replaced with the futuristic accounts payable automation systems. Automation is so much adored for its accuracy and speed. So, if you are still hesitant, it is time you should take up the call of automation.