Commons Accounts Payable Problems and How AP Software Can Resolve
Well-managed accounts payable (AP) process can help companies gain visibility into the invoice and cash management. However, manual AP management will lead to common challenges and problems in real-time. Let’s take a look at some of the common AP problems and how accounts payable software can resolve those and ensure effective AP management.
Common AP Problems
Data Management
AP processes involve lots of paperwork and documentation. As the business grows, there will be an increase in the number of documents processed. The cost to store documents increases with every paper invoice. Furthermore, the paper documents make it difficult to access, manage, and track the information, resulting in duplicate payments.
Inefficient Invoice Process
In accounts payable, information needs to be delivered to the right people at the right time. Not doing so will result in the slow payment process, inefficient information flow or missing information. The inability to provide the information at the right time will negatively impact decision making.
Gathering Invoices from Different Suppliers
As suppliers use different formats, channels, and currencies to issue invoices, collating invoices may become daunting. Matching invoices, purchase orders, assigning invoices to various cost centers, and matching payment information with your accounting systems is where AP department face problems.
Manual Entry
Manual entry would result in human errors and will take up employee time to verify and correct the errors instead of focusing on other important activities.
Exception Handling
Handling exceptions in AP are very complex with so many invoices coming from various sources. Often, documents have many discrepancies and sorting out all those will not only take much time but also requires constant effort in verification and validation.
Lack of Visibility
Manual AP management would result in lack of control and visibility. Non-compliance requires companies to gain control over financial processes to avoid fraud and ensure audit requirements are met whenever you process a new invoice.
Managing the Accounts Payable
Effective AP management means having the ability to manage paperwork and documentation effectively. Automated AP software minimizes the risk of losing documents, improves document search flexibility and reduces human resources needed for invoice management. AP functions include reporting and analysis instead of just recording and reviewing transactions.
Organizations are starting to adopt accounts payable software solutions to improve overall management and add more value to the organization.
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