Are you truly aware of the financial flow within your business? It’s a critical insight necessary for effective company management. Yet, many teams lack accurate visibility into their daily cash flow, posing a significant challenge. Traditionally, businesses heavily relied on their accounting staff to manually monitor payments through accounts receivable (AR) and accounts payable (AP). However, this manual process consumes considerable staff time and resources.
Recent studies indicate that finance teams spend between 14 to 23 hours per week managing these functions, with up to 520 hours per year dedicated solely to AP tasks. Moreover, manual tasks consume a significant portion of finance teams’ time, with respondents citing 25% spent on various manual processes. This manual approach is straining as skilled accounting labor becomes scarce and expensive. The decline in CPA exam takers, coupled with an aging workforce, has resulted in difficulties filling accounting positions. Consequently, businesses are forced to increase wages to attract talent, leading to higher labor costs. Beyond inefficiencies and rising costs, manual AR and AP processes present three key challenges for businesses:
1. Transition to Embedded Finance and Accounting Automation: Accounting automation is increasingly vital due to rising labor costs and the pace of business operations. Small to midsize businesses recognize automation as crucial for improving financial operations and efficiency. Embedded finance, integrating payment processes within accounting software, is gaining traction. By automating these functions, businesses can streamline operations and reduce errors.
2. Lack of Awareness and Understanding: Many business owners and finance leaders are unaware of available options for implementing embedded finance solutions and automating core accounting functions. Integration challenges, such as running CRM and payment tracking separately, hinder automation adoption.
3. The Cost of Manual Accounting: Manual accounting impedes business growth by consuming time and resources. In today’s fast-paced environment, manual processes hinder quick and reliable cash flow visibility, hindering the ability to seize growth opportunities.
Accounting automation is no longer a luxury but a necessity for business success. To address these challenges, consider exploring automated AP/AR solutions to save time and resources. Contact us to discover how our accounting solutions can benefit your business.