"Automation" has become a buzzword across multiple industries, especially as the demand for AI surges. And while there's some fear of automation replacing existing jobs, the truth is that in many cases, it simply augments and maximizes the productivity of employees by allowing them to focus on the highest value tasks.
Higher education institutions are the latest frontier to lean more heavily into automation, particularly harnessing its power for financial operations that have become cumbersome and also vulnerable to cyber risks. And more specifically, they've begun to embrace accounts payable (AP) automation. Here's a look at why.
What Started the Shift Toward Financial Automation?
The COVID-19 pandemic transformed life as a whole for many. It also changed how various businesses and institutions operated.
In the case of colleges and universities, accounts payable departments needed to find a way to continue to operate while working remotely. Maintaining continuity with a scattered workforce can prove to be difficult, so departments had to adapt. Some began using automation to handle some of the more tedious tasks.
Now, accounts payable departments are back in their offices, but automation still plays a significant role in day-to-day business. During the pandemic, institutions began to discover some of the many benefits of accounts-payable automation:
Increased efficiency
Cost reduction
Enhanced visibility
Better security
Real-time data analytics
Department leaders have begun to realize that automation can lead accounts payable departments into the future. According to Nasser Chanda, CEO of Paymerang, "By leveraging these capabilities, finance leaders can make strategic and well-informed decisions at any moment."
How Does Financial Automation Improve University Operations?
To understand how financial automation improves college and university operations, you need to understand how accounts payable departments operate without automation. In many cases, institutes of higher education still rely on manual, paper-based processes.
Chanda notes that these processes "only add to the stress, fatigue, and burnout that finance professionals are experiencing" and that manual accounting leads to problems like "slow approval times, error-prone data entry, costly paper, and limited visibility." With automation in place, professionals can avoid errors and have more time to focus on vital tasks.
It may not be immediately obvious how improving the workflow of the accounts payable department improves student experience. However, saving cost and time at this level impacts other departments as well.
With automation taking care of the tedious, time-consuming work, finance professionals have the time and energy to develop initiatives that actually further the mission of the institution itself. And because automation almost always results in considerable cost savings, the institution will have the budget to fund said initiatives.
Automated accounts payable systems may also save colleges and universities a significant amount of money over time. Because manual processing takes so long, institutions often miss out on early payment discounts and incur late fees.
How Can Automation Reduce Cyber Risks?
Just about every type of business or institution has to contend with cyber security risks. However, colleges and universities are some of the most targeted institutions. Why? Chanda says, "One of the most significant risks includes the large amount of vulnerable data housed at higher education institutions, including student records and financial information, making it a goldmine for a ransomware attack."
In other words, cybercriminals can attack university systems with software that effectively holds data hostage. The software encrypts the data, and to get the key to decrypt it, the institution must send the criminals a set amount of money.
That's not the only thing that puts institutions of higher education at risk for cyberattacks. As budgets steadily shrink, many accounts payable departments are stuck with outdated systems and infrastructure that are easier for cybercriminals to target. And with limited IT funding and little cybersecurity, there's not much they can do to lower that risk.
So where does automation come into play? With the right automation, institutions gain access to a whole suite of measures that both secure data and take proactive measures to prevent attacks. These are just some of the ways automation can enhance cybersecurity:
Protecting data with multi-factor authentication
Encrypting sensitive data
Using and updating antivirus software
Patching software
Enforcing user account permissions
Regularly and completely backing up data
One of the main advantages of cybersecurity automation is that it evolves alongside threats. Cybercriminals are constantly learning to circumvent protective software. But compared to other solutions, automated security is arguably the best at keeping up.
The Right Automation Solutions Make All the Difference
It has become clear that financial automation is the future of university finances. However, you don't want to entrust your accounts payable information to just anyone.
The solution? Adopt a comprehensive software solution that offers secure, streamlined invoice automation and payment automation services. Many of these software options can work with your existing accounting system. All in all, this can be the most optimal way to transform your institution's accounts payable department.
