Top 6 Ways to Eliminate Pains in Accounts Payable
If you have worked in the finance department, then you already know how much effort and time is spent on processing supplier payments. Poor AP performance problems are not always the easiest way to identify, especially when an organization has a good accounts payable process in place.
Here, we present the common accounts payable challenges that can affect your organization’s productivity, supplier relationships, and bank account, and a solution to eliminating them.
- Tracking Invoices is Not Easy
Several accounts payable departments are still manually managing processes and workflows that make it quite simple for any invoice to slip through the cracks. Even today, invoices come via email or are dropped on someone’s desk, and sometimes sent through fax.
Once you get an invoice, you need to take it to the manager physically for processing or email it to some other signer. This entire process is time-consuming, and employees need to be more careful to make sure they don’t miss an invoice.
2. Manual Accounts Payable Process is Time-Consuming
It is observed that more than 12 percent of companies process an invoice in less than three days. Manually entering data to Excel spreadsheet, scanning paper documents, handling paper checks, and more are not only time-consuming but mentally and physically taxing as well.
Managing paper pile-up such as storing, categorizing, and filing crucial documents can be stressful and occupy office space.
3. Invoice Processing is Expensive
By depending on the size of your organization and the complexity of the process, this expense can creep into the $30 to $40 range. When you think about how many thousands of invoices your business processes every year, the number can add up quickly.
Time is also occupied, responding to inquiries about payments from clients, vendors, staff, and rectifying an error that has occurred along the way.
4. Unable to Receive Real-Time Information
One of the key aspects of handling your AP activities is by knowing that your accounting reports are updated and that your financial records must provide visibility on current accounts payable balances.
Without real-time or updated information, businesses are unable to view how their suppliers are getting paid. This will impact overall financial projections and strategic planning for future projects.
You need to automate the reconciling process and have access to real-time reporting capabilities so that everything is updated.
5. Invoice Errors are Common
Manual key-in mistake, broken spreadsheet formulas, data entry errors, or inappropriately coded line items are the common issues faced during the accounts payable process.
Late payments are an accounts payable employee’s worst nightmare. Interest charges and incurred late fees from a delayed invoice can take a toll on your bank account. Late payments and errors can tarnish your supplier relationships rapidly.
Accounts Payable Solution to the Rescue!
Every single pain point can be addressed with an accounts payable automation solution. By transforming your invoice management and simplifying accounts payable from high-touch to low-touch process, you will be able to minimize expenses and streamline working capital, reduces data entry errors, eliminate paperwork, have your invoices in a single seamless workflow, and more. Companies that have implemented automated accounts payable system have witnessed tremendous savings.
