Running accounts payable manually is almost similar to spinning dozens of plates at the same time. Eventually some plates are going to fall. Still, surprisingly 61% of SMB’s still do their accounts payables manually, even when manual processing makes the 62% of the processing cost. Reasons behind being, most of the growing businesses fear the complexities of implementing the automated accounts payable solutions despite its multiple benefits. Continue reading this article to learn more about why SMBs should prefer using automated accounts payable solutions rather than manual processing.
Why is Manual AP Not Good for Your SMB?
If you are a business owner, and your business is losing money, chances are you’re not losing money because your product isn’t good enough. You’re not losing money because your team isn’t trying hard enough. You’re losing money because you are not tracking everything. You are still using the same process which is making your cost higher, rather than using the new options.
In a growing business, everything happens fast, because it’s necessary. But deep down there’s a quiet compounding issue which affects everything, it’s “inefficient financial workflows” and the accounts payable (AP) process. A faulty and outdated AP process doesn’t just slow down your business but also the error-prone process slowly and silently can ruin your business.
1. Manual AP Eats Up Finances Silently
For a growing SMB, manual accounts payable is too expensive. Infact, about 62% of cost comes from the labor cost of manually typing invoices, always looking for the invoices and redoing and fixing the mistakes. On average, manual AP costs $12-$35 per invoice compared to just $2-$5 with automation. So, this means, if you process around 750 invoices a month, this becomes over $135,000 a year wasted. This $135,000 could’ve gone to more strategic planning; instead it’s getting burned on the paperwork.
2. Slow Payments Hurt Cash Flow
Doing your accounts payable with an outdated manual process is painfully slow, in fact it can take around 14.2 to 16 days to process just one invoice. Now compare this to just 2-3 days with AP automation. Still, about 49% of SMBs spend more than 5 days a month processing these invoices manually.
3. Errors and Frauds Can Cost Big Time
Manual invoice entries can be full of mistakes and errors, in fact according to a study by APQC the average rate of errors and mistakes in invoices is more than 20% for manual processes. To correct and fix these errors, the AP team spends more than 17 hours a week. Even a 2% error rate can cost around $200,000 a year for SMBs. Plus, fraud risks are also much higher in organizations with weak AP controls.
4. Poor Visibility
Manual AP means no real-time tracking. SMB finance teams spend 10+ hours a week chasing invoices instead of planning for growth. Without dashboards, you can’t see cash flow clearly, making it difficult for finance projections and negotiating better terms. 60% of CFOs say AP delays hurt their decision-making.
5. Compliance and Audit Headaches
Paper-based manual accounts payable lacks proper audit trails. Missing invoices & approvals and unauthorized purchases are common. This exposes SMBs to fines and compliance risks. Manual processes make audits stressful and expensive, while automation ensures every step is documented and secure.
What Makes Automated Accounts Payable a Benefit for Your SMB?
Managing accounts payable manually is not a simple task; it’s like a never-ending cycle of paperwork, approvals, and delays. Automated AP transforms your workflow by reducing errors, improving compliance, and giving you full visibility into your cash flow.
1. Save Time and Money
AP automation helps small businesses cut costs and free up time. It handles data entry and approvals instantly, reducing errors and paperwork.
2. Reduce Errors and Increase Accuracy
Manual entries lead to mistakes like duplicate payments or incorrect amounts. Automation minimizes these errors using built-in checks and matching.
3. Speed Up Payments and Improve Cash Flow
Automated AP speeds up invoice processing, helps avoid late fees, and strengthens vendor relationships.
4. Real-Time Visibility
Automation shows every invoice and payment in one dashboard, offering clear insights into cash flow.
5. Simplify Compliance and Audits
Automated AP solutions like Zenwork Payments create a clear record of every transaction, making audits simple and ensuring tax compliance.
Why Zenwork Payments Is Best for Your SMB?
Zenwork Payments is built for SMBs simple, powerful, and free of hidden fees. It lets your team approve, pay, and generate compliance-ready 1099 records in one workflow.
FAQs
1. Why should SMBs not choose manual AP?
Manual AP is slow, error-prone, costly, and vulnerable to fraud.
2. How AP Automation improves cash flow?
Automated AP speeds up invoice processing so vendors are paid on time, avoiding late fees and improving relationships.
3. Is AP automation difficult to implement for my SMB?
No. Modern solutions like Zenwork Payments are designed to be simple and require minimal setup.
4. Does Zenwork Payments help with my tax compliance?
Yes. It creates audit-ready records and stores all tax details needed for 1099 filings.
Conclusion
Growing your SMB isn’t just about working harder it’s about working smarter. Manual AP is slow and error-prone. Zenwork Payments gives you faster invoice processing, better vendor relationships, and 100% compliance-ready records.