Exceptional companies are adept at eliminating wasteful spending and inefficiencies at every possible opportunity. At the same time, businesses within industries like construction, contracting, or architecture are notorious for using paper invoices and conducting manual data entry. Although digital transformation can be an intimidating undertaking, especially for legacy companies, there are tangible benefits to making the switch. In turn, businesses put themselves in a position to optimize long-term health by simply automating their accounts payable (AP).
Automatic AP not only reduces invoice expenditures (which can range from $25 to $40 per invoice), but also saves countless personnel-hours each fiscal year. Additionally, automatic AP paves the way for more accurate record keeping, reduced storage costs, better business intelligence, faster payment times, and more easily accessible payment history. By making the switch to an innovative invoice management software like Listo, businesses give themselves a distinct advantage when compared to peer-companies using legacy systems.
Maintain Continuity of Operations
As demonstrated by COVID-19 disrupting businesses worldwide, major fluctuations in the pattern-of-life for businesses can pose substantial issues. For companies within industries like construction, disruption comes in all shapes and sizes. Job-cancellations, major contracts, and delays can each have a sizable impact on day-to-day operations. In turn, business leaders are oftentimes placed into a situation where they are forced to either quickly scale or rapidly reduce manpower.
During these critical times, paperwork can sustain a heavy toll. As the entire office is scrambling, organizational best-practices are typically an afterthought. For businesses that rely on legacy systems, manual data entry, or paper invoices, disruption can quickly lead to disaster. In situations like this, AP automation is more important than ever. By integrating this cost-effective solution into core business operations, companies not only spend less time sorting through tedious files and paperwork, but expedite contracts and business relationships too. As a result, they are better able to focus on the core competencies that drive their bottom line.
Powerful Cost Reduction
Companies that maintain manual data entry spend an average of 60% more on invoices than those that incorporate automatic AP. Although this statistic alone can surmount to tens of thousands of reclaimed profits over the course of a year, the cost effectiveness of automatic AP goes one step further. When personnel hours, inaccuracies, fraud, and lost partnerships are taken into account, the power of automatic AP is significantly compounded.
For example, consider the salaries of the admin department personnel who are responsible for manual data entry. Next, take into account the lost profits that can result from fraud or inaccurate data. Lastly, take a cost-benefit analysis of potential lost partnerships from efficient, affordable, and effective long-standing subcontractors who don’t want to wait upwards of 60 days to receive reimbursement. When the totality of the costs are considered, automatic AP has a clear edge over manual entry that can significantly help keep businesses healthy.
Improved Contractor Relationships
Top tier contractors have industry-leading effectiveness rates at a cost that’s affordable considering the quality of their work. When construction companies are establishing partnerships with these contractors, it behooves them to maintain a great working relationship. In doing so, they can keep costs low while providing their end-client with an exceptional product.
At the same time, contractors rely on getting paid in a timely manner. As was mentioned above, some manual invoice systems can take upwards of 60 days to send out payments. In turn, extraordinary contractors may continue to provide high-quality work elsewhere (if demand is high enough). By losing a go-to contractor, businesses are placed at a competitive disadvantage that can cause them to lose future contracts, current long-standing clients, and above all, profits. Instead, payment software like Listo streamlines payments while paying contractors on an expedited, 30-day timeline. In turn, businesses put themselves in a better position for long-term profitability and health stemming from great partnerships.
Resolving Common Challenges
Invoice automation has a tendency to resolve the most common pain points for AP. For example, automatic AP prevents manual invoice routing that can eat-away at precious personnel hours. Additionally, automatic AP prevents critical invoices from being lost or misplaced, as they re maintained in a comprehensive online database. Automatic AP also resolves consistency issues that can arise from countless different invoice formats that flow in and out of businesses each day. Also, automatic AP helps centralize the overall AP process, leading to unparalleled consistency and speed.
Overtime, any one of the common pain points above can eat away at the long term health of even the most successful operations. As businesses are forced to scale, the problems only get exponentially worse. By implementing automatic AP early on, businesses afford themselves and their staff an opportunity to learn the intricacies of any program.
Are you a decision maker at a large company seeking improvements through digital transformation? If so, are you concerned about the short-term consequences that can result from making changes? Although shifting to automated systems presents a unique opportunity for efficiency, the initial change could disrupt operations if your team isn’t able to quickly adapt to the new system. That’s where software like Listo comes into play. By offering an easy-to-learn system, even major enterprises can quickly adapt to the future of payment tech.
AP Automation In Construction
Construction companies that use paper invoices face disproportional challenges when compared to other industries. Due to the nature of construction, mobility comes with the territory. With different locations for administrative paperwork, job sites, warehouses, and more, even a local construction company can operate over an expansive territory. With countless key players in the administrative approval chain, paperwork can quickly become jumbled if automatic efficiencies are not set into place.
By implementing automatic AP, construction companies set themselves up for major long-term benefits. Critical paperwork cannot only be accessed from anywhere, but can be sourced in minutes as opposed to hours or even days. Additionally, these businesses can avoid the complexities that can arise from lost or missing paperwork. More efficient processes are as important to internal functionality as they are to making lasting impressions on future partners.
Closing Remarks
Forward-leaning companies have been incorporating automatic AP for decades. With software like Listo, making the shift to automation has never been easier. As a result, businesses in construction and beyond can expect to reduce costs, maintain more consistent operations, foster better working relationships, and resolve the common pitfalls that plague companies. Any business leader who is seeking to strengthen the longevity and health of their organization can do so by implementing automatic AP if they haven’t already done so.
Are you a business leader who is seeking to benefit their company through digital transformation? If so, consider signing up for Listo! As the premier automatic invoice software, Listo puts your company at an advantage when compared to manual data-entry based companies. Best of all, you can try Listo risk free with a 30-day free trial.
Please consider sharing this article on LinkedIn if you found it helpful. Thank you for reading, and we are looking forward to strengthening the long-term health of your company through automatic AP.
