Accounts payable automation is an increasingly popular way for businesses large and small to create positive change; its benefits are real, proven and repeatable. Unfortunately, a few persistent myths are holding many companies back from automating AP. In this exclusive BerkOne blog series, we’re investigating one each month; this entry explores whether or not automating processes actually results in job cuts.
There is a particular pop culture fear – usually accompanied by images of mechanical arms building cars – that, in the near future, human workers are going to be replaced by robots.
Automation, the thought process goes, eliminates the need for people. Thus, an automated task is one that would lead to job cuts – and if a corporate leader cares about his employees, he would shy away from things like AP automation.
That fear, we are happy to report, couldn’t be further from the truth. No reputable AP automation vendor has ever walked into a department head or CEO’s office and proudly announced that “If you do this, you can eliminate 15 jobs!” Such an attitude wouldn’t just be insensitive; it would be counterproductive.
The point of automating accounts payable is to eliminate unnecessary manual processes and streamline workflows – not to take people out of the equation entirely. It’s not about cutting people; it’s about making people more efficient and more valuable to the bottom line.
Think about it: Is an AP manager with 20 years of experience going to contribute more by typing line items from invoices, or by analyzing workflows to identify cost-saving efficiencies? One of those is a non-value-add task – just as easily performed by a software solution. The other is extremely value-add, and requires a trusted hand and experienced mind. AP automation software is about saving the time required by the former to enable employees to focus on the latter – and turning AP into a profit center.
The argument that eliminating non-value-add manual processes costs people their jobs loses even more traction when you consider early payment discounts. When using proper imaging and OCR software, a scanned invoice can have critical data extracted and entered into the system of record in seconds. That extra time can help dramatically increase the number of invoices paid early enough to qualify for vendor discount. Those discounts can add up quickly, representing a net decrease in the cost of goods sold and thereby an increase in profit. So, if AP is helping fuel the bottom line, there’s no reason to reduce the department size.
The rumors are not true. AP automation does not necessarily lead to headcount reductions because digitizing pieces of the accounts payable puzzle is not like replacing Henry Ford’s assembly line workers with today’s robotic arms. AP will always need people – and they don’t need to waste their time on menial tasks.
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