Accounts Payable: The cost of doing nothing
Good businesses naturally think carefully about the costs of everything they do. This makes it easy to think that doing nothing means avoiding unwanted costs. However, the cost of doing nothing is very real, and that’s certainly the case when it comes to invoice processing.
Marketing expert Seth Godin famously said, “The cost of being wrong is less than the cost of doing nothing,” but this is an understatement in this case. Godin was encouraging firms to take a risk and make changes rather than stagnate. With Accounts Payable (AP) automation, it’s not just a matter of risk, it’s simply a case of better calculating the costs and the overwhelming benefits of action vs. inaction.
The best way to sum up the number one reason businesses shy away from change is, “If it ain’t broke, don’t fix it.” However, without change, a business can never improve or grow. What might seem adequate or “not broke” today could be exposed in the future if customer tastes change, competitive landscapes grow, technology evolves, or costs are upended. Corporate history is filled with companies that were doing fine…until they weren’t. Take the recent pandemic, for example, and the upheaval it had on businesses.
Putting business studies aside for a moment, the fact is that manual invoicing is “broke.” It’s inherently prone to delays as paperwork moves across your hierarchy. It exposes you to losing money with potential duplicate payments and invoicing fraud. It also exposes time wasted from keying data and the potential errors occurring, and leaves you wide open to delay and disruption as paperwork gets misfiled or lost.
Fear of change
Businesses often fear change because it’s a combination of human nature and corporate culture. The key to successfully transitioning, in this case an automated AP solution, is support from decision-makers. If the people in charge incorporate an evolutionary mindset, value their people, and make it clear they back the move, the employees who have to implement the changes become more confident. This makes it easier to focus on the very real benefits rather than the imaginary downsides.
Rewards over risk
One of the biggest barriers to change is making uneven comparisons. Because the risks of change are often largely psychological, it’s very simple to say “it could cost a lot and be a hassle.” This usually means every risk vs. reward comparison pits the unified downsides against a single benefit.
With AP automation, you really need to look at the big picture and focus on the many benefits:
- You save staff time and resources by automating invoice management, freeing them to use their skills and expertise better.
- You can process payments more quickly, avoiding late fees or letting you negotiate early payment discounts.
- You can quickly spot any errors and discrepancies, whether human error or otherwise.
- You can spot patterns in your payments and purchases, for example, highlighting where you could make changes to get bulk order discounts or more efficiently manage your warehousing and stock levels.
Each of these benefits can make a real difference, but only by considering them as a package can you see (and explain) why they outweigh the perceived cost and hassle of changing.