Every second and every penny counts in the world of manufacturing. Efficiency is key, especially for your accounts payable (AP) departments. But a slow workflow that relies on outdated, manual processes can slow your flow — and bog down your bottom line.
Choosing between an automated or manual process can make or break whether you stay on track or fall behind. So, what’s the difference between the two, and why should manufacturers take notice?
Let’s weigh the options and explore automation vs. manual processes — and why AP automation for manufacturing is quickly becoming the industry standard.
The Reality of Manual AP Processes
Think about a typical day in a manufacturing AP department. Invoices from suppliers come flooding in, sometimes hundreds at a time. The team goes through the tedious manual process of entering each one into the system, matching it with POs and receipts, verifying amounts, and seeking approval from various departments. But even with a well-organized team, mistakes are bound to happen. Typos, lost invoices, or delayed approvals can lead to payment errors, vendor issues, and penalties for late payments.
This process isn’t just slow — it creates a high risk for human error. Manual data entry is prone to mistakes, like incorrect amounts or duplicate entries. While a single error might seem minor, when you're dealing with thousands of invoices, these mistakes can add up to substantial financial losses. Plus, there’s the issue of visibility. Manual processing takes time, and without up-to-the-minute data, it’s hard to get a clear picture of what’s happening with your cash flow. This makes decision-making and forecasting difficult.
The Challenges of Manual Accounts Payable
Manual accounts payable presents several challenges, especially in the manufacturing industry:
- Time-Consuming Data Entry. Manually entering invoices takes a lot of time — especially when you're processing hundreds or even thousands of invoices every month. Each step can create delays, from matching invoices to purchase orders (POs) to tracking down the right people for approvals.
- High Error Rates. Mistakes are unavoidable when humans are responsible for data entry. Typos, mismatches, or overlooked invoices can lead to big problems, including duplicate payments or missed deadlines. These errors add up over time and can negatively impact your company’s bottom line.
- Lack of Visibility. Manual processes make it hard to see the bigger picture. Without real-time information, it’s hard to get a realistic picture of your cash flow. You may not be able to accurately see which invoices are outstanding or whether payments are being made on time. This lack of transparency can lead to poor financial management.
- Vendor Issues. A reliable supply chain is critical in manufacturing. Late or incorrect payments can damage relationships with suppliers. This can disrupt production schedules and strain partnerships with key vendors.
- Increased Costs. Wasting time on manual tasks like data entry, error correction, and chasing approvals is expensive. The risk of late payment fees or compliance issues can also create unplanned for costs. Over time, these expenses can greatly drain resources and leave your bottom line lacking.
AP Automation to the Rescue
AP automation can help you overcome the challenges of manual processes — and more.
Automated systems, like Nimbello, are transforming how manufacturers manage their accounts payable processes. By removing manual steps, AP automation boosts efficiency, reduces errors, and allows employees to focus on other key tasks.
Let's break down the top benefits of AP automation:
1. Time Savings
Manual data entry, approval workflows, and error correction take up valuable time. Automation handles these tasks much faster. Invoices can be scanned, matched with POs, and routed for approval instantly, requiring little to no manual effort. Faster processing time frees up your AP team to focus on tasks that actually help grow the business.
2. Fewer Errors
Eliminating manual data entry reduces human error. Automated invoice processing cuts down on mistakes like duplicate payments or incorrect amounts — leading to healthier finances and stronger vendor relationships.
3. Real-Time Visibility and Control
One of the biggest challenges of manual processes is a lack of visibility. In manufacturing, an accurate financial picture is critical for making smart decisions. AP automation provides real-time data, giving you a clear view of outstanding invoices, upcoming payments, and your overall cash flow. These insights help you make more accurate budgets and avoid surprises at the end of the month, quarter, or year.
4. Cost Efficiency
Investing in AP automation may seem like a big step, but it promises to pay off in the long run. And for manufacturers processing large volumes of invoices, these savings can be significant. Eliminating manual work saves time and mitigates errors — helping lower operational expenses and avoid fees or penalties.
AP Automation for Manufacturing: A Competitive Edge
For manufacturers, AP automation isn’t a luxury — it’s a necessity. With supply chains growing more complex and the constant pressure to cut costs and increase efficiency, automation is the key to staying competitive. Manual processes can’t keep up with these growing demands.
Here’s why automation is especially critical for manufacturers:
1. Handling High Volumes with Ease
Manufacturers often process hundreds or thousands of invoices each month. Manually handling this influx of invoices requires time and manpower that could be better used elsewhere. Automation ensures that even high volumes are processed quickly and accurately.
2. Strengthening Supplier Relationships
Accurate, on-time payments are crucial for strong supplier relationships. But when you’re manually processing hundreds of invoices at a time, something is bound to slip through the cracks. Automation ensures that suppliers are paid on time, every time, so you can maintain good vendor relations — and even negotiate better terms or take advantage of early payment discounts.
3. Staying Compliant with Industry Regulations
Compliance is more than a big deal in the world of manufacturing — it's an essential part of every project. AP automation systems help ensure your payments and processes meet industry regulations, like tax compliance and audit standards. This reduces the risk of penalties and keeps your company compliant.
4. Better Use of Resources
In a manual system, your AP team is stuck doing data entry and matching invoices. Automation frees up these valuable resources. This lets your team focus on more strategic activities, like analyzing spending trends, negotiating with suppliers, or improving financial operations.
Automation vs. Manaul Processes: A Clear Winner
The choice between automation and manual processes may seem daunting, but when you weigh the benefits, it’s clear that automation provides the tools you need to stay competitive in the fast-paced manufacturing industry. If you’re still using manual AP processes, it’s time to consider how automation could change your operations.
With the right AP automation solution, you can streamline workflows, reduce errors, and improve cash flow visibility — all while cutting costs.
Nimbello’s AP automation platform is built specifically for manufacturers, offering customizable solutions that integrate seamlessly with your existing ERP system. Whether you’re a small manufacturer looking to modernize your AP process or a large enterprise seeking more control over your finances, our automation tools can help.