Is manual accounts payable dragging your business down?

It’s astonishing that in an age of automation, many businesses still rely on manual processing for accounts payable (AP). Finance teams are under growing pressure to manage cash flow, cut down on errors, and boost efficiency – but outdated methods are holding them back. Despite the availability of digital solutions, plenty of organisations still handle AP using paper invoices, spreadsheets, and manual approvals. These processes are slow, error-prone, and expensive. 

According to the Accounts Payable Automation Trends 2024, 52% of AP teams spend over 10 hours a week processing invoices manually, with costs reaching up to $15 (R280) per invoice. These costs encompass labour, administrative tasks, and follow-ups.

Relying on email-based approvals requires back-and-forth communication that slows everything down. Late approvals lead to late payments, straining relationships with suppliers and leading to potential penalties. This leaves finance professionals stuck in a cycle of data entry, chasing approvals, and correcting errors, with little time for strategic work. The more invoices an organisation processes, the more time is wasted on admin. 

Automated accounts payable solutions significantly reduce these costs to around $1.77 (R33) per invoice. Through decreased manual data entry, streamlined approval workflows, and enhanced accuracy, automation also saves 70-80% of the time AP staff spend on manual tasks, reduces errors, lowers audit fees, and cuts paper and supply costs. 

Additionally, businesses incur indirect costs such as lost early payment discounts, which automation can help capture. Late payments can also lead to higher fees and strained supplier relationships, further increasing expenses.

Risk of errors and fraud

Human involvement in every step of the Accounts Payable (AP) process makes it more likely for mistakes to happen, like paying the same invoice twice, missing invoices, and entering incorrect data. Manual processes can lead to financial risks when fraudulent invoices are overlooked.

Without proper audit trails in manual AP processing, businesses have a hard time tracking who approved payments and for what reasons, which weakens their financial controls."

Lack of Cash Flow Visibility

Finance leaders need real-time insights to make smart decisions. However, manual AP processes offer limited visibility, making it tough to track spending, outstanding payments, or forecast cash flow accurately. Without automation, businesses might make financial decisions based on outdated or incomplete data.

Delayed invoice processing can lead to cash flow mismanagement and unexpected shortfalls because finance teams lack an accurate picture of liabilities.

Compliance and audit challenges

Regulations require accurate, auditable financial records. Manual AP processes make audits time-consuming and prone to missing documentation. Lost invoices, incomplete records, and human errors can pose compliance risks and lead to financial penalties.

Without digital records finance teams have to scramble to locate past transactions, causing delays during internal and external audits.

Modern AP automation solutions integrate with ERP systems, accounting software, and banking platforms, ensuring seamless data exchange. No need for manual data entry and ensures consistency across financial records. Eliminating data silos gives businesses a unified financial view, improving accuracy and reducing reconciliation time.

With remote access, AP teams can manage invoices, monitor payments, and access financial documents from anywhere, making workflows more efficient and supporting hybrid work setups. Automated backups protect financial records from data loss, cyber threats, and compliance issues.

Enhance efficiency; take control

Here are six benefits of AP automation that will streamline business operations, reduce costs, and improve overall efficiency:

1. Time savings and productivity 
AP automation eliminates the need for manual data entry and streamlines approval workflows, allowing finance teams to focus on more strategic tasks. This boosts productivity and job satisfaction.

2. Cost reductions 
By automating the AP process, businesses can reduce processing costs by up to 80%, freeing up resources for growth initiatives, innovation, or employee development. The ROI is typically realised within months.

3. Better cash flow management 
Real-time visibility into financial data helps businesses optimise cash flow, negotiate better terms with suppliers, and take advantage of early payment discounts.

4. Improved compliance and security 
Automation ensures audit-ready records, secure access controls, and automated tracking, mitigating the risks of fraud and human error.

5. Stronger supplier relationships 
Automated processing ensures timely and accurate payments, reducing disputes and fostering better pricing and service levels.

6. Scalability for business growth 
As businesses grow, manual AP processes become unsustainable. Automation supports business growth by providing scalability that manual processes can't handle, allowing companies to expand efficiently without adding administrative overhead