8 Reasons Businesses Avoid AP Automation

Automation may seem like a difficult endeavor at first, but knowing why businesses avoid automation can help answer all the unknowns.

With the rise of automation globally, it’s not hard to imagine that accounts payable (AP) is quickly becoming a popular space for this technology. Why? Because in accounts payable work, many processes are repetitive so software can be programmed to perform functions accurately and independently.

Despite the growing interest for this solution, only 5% of mid-sized firms have fully automated their AP or accounts receivable (AR) processes according to a 2023 PYMTS Intelligence report. But what’s holding businesses back from full automation adoption? This CloudX blog will explain.

Cost Considerations

Businesses often perceive the costs of AP automation prohibitively high for several reasons. First of all, the initial investment required for acquiring and implementing automation technology is generally the biggest expense and can include the purchase of software licenses, hardware upgrades, and the integration of systems with existing infrastructure.

Once an AP automation solution is implemented, there are also ongoing costs associated with maintaining and updating systems. This includes expenses related to software subscriptions, technical support, and periodic software upgrades to ensure the technology remains current and secure.

Some financial leaders also admit they fear potential hidden costs involved. They may worry about unexpected expenses arising from system failures, security breaches, or compliance issues, which can further dissuade them from investing in accounts payable automation. Together, these factors create a perception that the financial outlay required for automation outweighs the long-term benefits.

Reality: Many providers offer scalable solutions, allowing businesses to choose plans that fit their budgets. Thus, despite initial perceptions, AP automation proves to be a cost-effective investment for the sustained financial health of AP operations.

Manual Processes Work Just Fine

Familiar processes tend to give employees a higher sense of control, and for this reason, some businesses believe they can continue to function effectively in their AP departments without automation.

Additionally, manual processes offer a tangible sense of oversight. For many AP staff, the physical handling of invoices, checks, and paper records provides a sense of security and control that digital systems might not immediately offer. The consistent hands-on approach allows for detailed review and verification steps, which some feel ensures accuracy and reduces the risk of errors.

Some businesses also believe that their current volume of transactions does not necessitate the need for automation. If the number of invoices and payments processed daily is relatively low, the perceived benefits of automation might not outweigh the investment required. In such cases, businesses may feel that the manual processes are sufficient for managing their workload without significant delays or bottlenecks.

Reality: AP automation is a significant improvement over manual processes by enhancing efficiency, accuracy, and security. This technology offers better financial visibility with real-time tracking and reporting, ensuring compliance with regulatory standards through audit trails and secure data handling, therefore reducing fraud risks. Overall, AP automation not only saves time and resources but it also strengthens financial management and operational efficiency.

Integration Concerns

When a business perceives there will be integration problems with existing ERP or accounting software, they will sometimes avoid considering accounts payable automation. They fear that the integration process may be complex, time-consuming, and fraught with technical difficulties. They may also be concerned about data discrepancies or synchronization issues, potentially leading to errors in financial records.

Moreover, some businesses worry about the long-term maintenance of integrated systems and want assurance that updates and changes to one system do not negatively affect the other. These integration concerns altogether can create a perception that the risks and costs associated with automating accounts payable may simply outweigh the benefits.

Reality: When a business chooses a reputable AP automation provider, integration concerns are minimized because top providers design their systems to seamlessly integrate with existing ERP and accounting software, ensuring smooth data flow. They offer robust support and customizable solutions to match specific business needs. As a result, businesses can focus on core operations without worrying about compatibility issues or technical glitches.

Perceived Vendor Resistance

A key worry for some businesses is that vendors may be unwilling or unable to adapt to automated systems, especially if they’re accustomed to traditional, manual processes. This resistance can stem from a lack of technical capabilities or not having the resources needed to upgrade their own systems to align with automation requirements.

It’s also been shared that imposing new requirements on vendors could strain relationships. Businesses think that vendors might view the need to adapt as an additional burden, leading to frustration or dissatisfaction, therefore impacting the quality of service and pricing negotiations.

Consequently, businesses worry that these integration issues could lead to operational inefficiencies and increased administrative efforts to manage transitions, ultimately outweighing the perceived benefits of automation.

Reality: Top automation providers offer user-friendly platforms that simplify invoicing and payment processes for vendors, encouraging smooth adoption. Additionally, they often provide extensive training and support, easing the transitions forward. As a result, vendors are more likely to embrace their respective automated systems, recognizing their benefits for efficiency and reliability.

Automation Will Replace Human Employees

As automation technology becomes more sophisticated, it can efficiently manage repetitive and time-consuming tasks, potentially rendering some accounts payable positions redundant. Because of this functionality, businesses often fear that accounts payable automation will replace their human employees–leading to job losses and decreased morale.

This fear is particularly pronounced in organizations where accounts payable departments are heavily staffed with employees whose primary responsibilities involve manual processing. The prospect of job displacement can cause anxiety among workers and lead to resistance against adopting new technologies. Employees may then worry about their long-term job security and career prospects, resulting in lower morale and productivity during the transition.

Additionally, companies are aware that layoffs or significant changes in staffing can have far-reaching implications beyond the immediate loss of jobs. They fear losing valuable institutional knowledge and the interpersonal dynamics that human employees bring to the workplace.

Reality: AP automation will not replace human employees; rather, it will enhance their roles and boost productivity. By automating repetitive and mundane tasks such as data entry and invoice processing, employees can focus on higher-value activities like financial analysis, vendor relationship management, and strategic planning. Concurrently, AP automation reduces manual errors, ensuring more accurate and timely financial data which employees can leverage for better decision-making.

The Implementation Time Will Be Too Long

A typical concern for businesses is the complexity of integrating automation with existing accounting and ERP systems. These integrations require careful planning, testing, and customization, all of which can extend the implementation timeline if problems arise.

Additionally, the transition from manual to automated processes necessitates comprehensive training for employees. Staff need to become proficient with the new software, which can be a time-consuming endeavor. This training phase often overlaps with regular work duties and can temporarily slow down overall productivity during the learning period.

The perceived duration of these stages collectively leads companies to think that implementing AP automation will be a lengthy, disruptive process, they don’t want to partake in.

Reality: A reputable AP automation provider ensures an easy and convenient implementation process by offering intuitive, user-friendly software that integrates seamlessly with existing accounting systems. Their implementation team then provides personalized support including comprehensive training, step-by-step guidance, and tailored solutions to meet specific business needs. This proactive approach reduces the learning curve and helps businesses quickly adapt to the new system to leverage its benefits.

We Will Lose Data Integrity

Transferring large volumes of financial data from existing systems to a new automated platform requires meticulous attention to detail. For this reason, businesses are often concerned that any discrepancies or mistakes in this process will lead to inaccurate financial reports and records, compromising data integrity.

There's also anxiety around the reliability of the automation system itself. Businesses may fear that system glitches, software bugs, or cyber-attacks could corrupt data or lead to unauthorized access, further undermining data integrity. This concern is amplified by the critical nature of financial data, where even minor inaccuracies can have significant repercussions.

Additionally, the lack of human oversight in an automated system raises concerns about detecting and correcting errors. Unlike manual processes where employees can directly verify and rectify issues, automation can prompt a perceived loss of control over data accuracy.

Reality: By incorporating advanced security measures and robust validation processes, an AP automation solution ensures higher data integrity and uses encryption and secure protocols to protect data during transmission and storage. Regular software updates and compliance with industry standards further safeguard a business’s data. With these features, a good AP automation solution is able to maintain data accuracy, reliability, and security, ensuring that data integrity is never compromised during the automation process.

Training Employees is Cumbersome

Training employees on a new automation system can feel like a lengthy process since it diverts staff from their regular duties and potentially disrupts business during the transition period. This can lead to temporary productivity and efficiency losses, which companies are keen to avoid.

Workers comfortable with existing manual processes may also be reluctant to adopt new technology, creating an uphill battle for management. This resistance sometimes leads to a lack of engagement with the training process, further diminishing its effectiveness.

Additionally, companies may doubt the long-term return on investment from training. They worry that employees may leave the organization after receiving expensive training and take their newly acquired skills elsewhere. As a result, companies sometimes become hesitant to allocate significant resources to training programs and instead stick with familiar, less efficient, manual processes.

Reality: Training employees on an AP automation solution is straightforward with the right provider. They will provide comprehensive training resources, including video tutorials, webinars, and detailed documentation–catering to different learning styles. Many providers also offer ongoing training and updates to keep staff proficient with the latest features. Thanks to these extensive resources and support mechanisms, employees can efficiently learn and adapt to the AP automation solution, ensuring seamless integration into daily operations.

Preparing for AP Automation with CloudX

Transforming your AP processes with automation isn’t as complicated as it may seem at first. Once you find a provider who fits your needs, you’ll see that implementing this software solution is a strategic move that can drive significant improvements in the efficiency, accuracy, and cost savings of your business.

For more information about how AP automation works and to learn more about APSmart by CloudX, please fill out our online form here.