Automation can help businesses of all sizes to become more efficient and in turn, benefit from increased productivity and customer satisfaction. Seems quite straightforward, doesn’t it? Surprisingly, according to a McKinsey survey, a mere 25% of small-sized companies are in fact, automated. The decision to go the digital route is often delayed because of the time and costly resources needed to develop and implement a new system, and only then, train employees on how to use it.

Then again, waiting too long to automate your organization can and does have consequences. Production workflow, for example, can be effected, even slowed to a halt or by holding on to manual processes. But what’s effected most of all is the customer experience that depends on timely development, production and distribution processes. When these can no longer scale up as the business grows, the customer is the hardest hit.

Here are the five bottlenecks that can let small and medium-sized businesses know that it’s time to go digital.


1. Late deliveries

Where there’s a large pile of paper orders, it’s easier for an order to be misplaced or even lost. When order data is recorded manually, it can be incomplete or incorrect, resulting in products not delivered on time, or not at all. But when business processes are automated, built-in dropdown lists and validations ensure complete, consistent and reliable order data. In addition, digital ‘paperless’ orders are easier to share with suppliers, helping to streamline the entire fulfillment process. 

2. Complex sales tax calculations

Tracking sales tax laws can be time consuming, particularly for businesses operating in multiple states, where each has different sales tax regulations.  What’s more, this problem is compounded when new products and services with new tax laws are added to a company’s portfolio. Automation ensures compliance with regulations in real time, enabling companies to generate “return ready” reports and perform e-filing – saving time and reducing the risk of errors.

3. Duplicate invoices

Paper invoices make it more difficult to track cash flow and can result in common errors, such as sending a duplicate invoice or the incorrect invoice to a customer. One industry study determined that invoice duplication alone can cost a typical SME more than $12,000 per month, a result of the time invested in customer communications, rectifying payments, and adjusting financial systems. In addition to streamlining invoicing processes and preventing errors, automatic invoicing can accelerate collections by sending late paying customers a series of reminders, or retainer customers, invoices at predefined intervals.  

4. Late submittal of payroll documents

There are business out there who manually onboard new employees. Collecting and filing paper forms is tedious, and there’s always the risk of not complying with regulations or not submitting payroll or tax documents on time. The American Payroll Association (APA) estimates that payroll automation, in addition to ensuring timely filing, reduces processing costs by as much as 80%. But when is it time for a company to go digital? As a rule, once a company has grown to the point where they can no longer actually ‘see’ when employees come and go, it’s time to automate their payroll. Aside from improving accuracy and compliance, automating payroll enables direct deposit, e-filing, and easier, more reliable tracking of accumulated vacation time and sick leave.

5. Unauthorized purchases

Automating purchase orders enables organizations to enforce approval policies and keep actual spending in line with budget. But once a company implements a full purchase requisition system, it gains full control over its expenses. For example, one CEO improved working capital immediately by shutting down the company’s purchasing requisition system, actually preventing employees from making unauthorized purchases. However, automating purchase orders can be tricky, since it typically involves several cross-departmental steps – from the initial request, to receiving the product, and then confirming that all requirements were met. Due to the complexity of the purchasing process, it’s often one of the last business processes to be automated. 

To potentially achieve the highest return on investment, businesses should first think about automating processes that are the most time consuming and present the greatest risk.  Advanced business management systems, namely cloud ERP, can be an ideal solution for SMEs. These systems are flexible and scalable, enabling new features and functionality to be added as required, while in parallel, eliminating both the expense and headache of managing hardware and software in-house. 

The best time to jumpstart your business automation is one step before system bottlenecks are a threat to customer satisfaction and profitability. By implementing a system that can start small and grow as your business grows, it is possible to automate your organization at just the right time, minimize risks and put fast-track your success.