Working in the accounts payable department is quite daunting. It includes processing vendor invoices and keeping your business running in back-office roles that typically goes unnoticed unless any incident blows up like an invoice not paid so the power is disconnected to a location, and all managers suddenly have eyes on you!

When you are headed down in the trenches, it becomes hard to pause and catch a breath, look up, and look for opportunities to enhance. This is not healthy for the department as well as for your business.

What are the reasons behind this AP dissatisfaction?

1. Very Painful and Lengthy Month-End Closing

This is a complete nightmare for many organizations. Month-end closing is a necessity that is often used in the same sentence as “pain.” Struggling with traditional paper-based processes leads to a time-consuming and tedious task.
Acceleration and data integrity that is combined with multiple data summaries gets impacted by manual accounts payable process. A process where the entire organization’s bottom line remains affected, receiving the right financial reports in the hands of managers is of greatest significance.

Instead of reconciling books at the end of every month, automation can make the entire process so much simpler for the AP department. Eliminating manual steps of collecting data and Excel spreadsheets with automation, cuts down days from the month-end closing process but links data back to a conformable source with activity audits, original invoices, and reporting only some clicks away.

2. Lengthy Invoice Processing Lead Times

If you are still handling invoices manually, then you know how difficult it can turn out to churn through an endless pile of invoices. With error-prone, tedious, and duplicate invoices, you will have a tough day to start.

There are many organizations that assign individual accounts payable to a single vendor because of extra contortions which require to be performed for processing their invoices into ERP system in a specific manner.

But what happens when that person is out of the office or on vacation? Purchase order based invoices must represent a fast win for automation because of the 3-way matching. True? You need to ask your peers in AP on how their process is automated.

For instance, emailing a purchaser with link to a PDF copy of the invoice on a drive asking how to deal with special charge which is not on the purchase order. The purchaser then goes into ERP and looks by opening the invoice on a shared drive, gradually moving that PDF to another folder once the problem gets resolved, and emailing accounts payable back with the update so they can process the invoice.

Handling invoices or indirect spend without corresponding PO presents similar annoying problems for the AP department. Determining manually about the budget holder and monitoring them for further approval delays the invoice for payment and takes time away from the department.

It means depending on sifting through calls and emails to ensure things are getting approved, opens the door for misplaced or lost invoices and late payments.

Ultimately, this result in friction across the entire company, frustrating AP department and vendor dissatisfaction when they receive late payments and their accounts receivable department has to chase you down.

3. No Visibility into the Financial Picture

Reporting on the present state of your organization’s finances is critical to creating prompt business decisions and for the public organizations, a legal need. Very often, business managers look to accounts payable for reports on cash flow and outstanding invoices.

Such requests for reports are a primary source of anxiety for several AP teams, who need to track down invoices physically for these reports in metal cabinets and approvers’ desk.

With accounts payable automation, there is no need for a paper trail to follow. All the records you process are stored and organized in digitized format conveniently, thus making it easy to search by keywords and search the invoice you require in a fraction of minutes.

4. Lack of Control and Inconveniences

The reason behind discontent may be a sign of a detrimental AP process. But it is the one that many organizations accept as characteristic of their daily dealings in accounts payable.

Without a robust and consistent accounts payable solution for streamlined process and guidelines for staff to follow, the AP department cannot be equipped for success. Some special corporate rules for managing specific invoices and contrasting forms that come through email, paper, fax, and more is error-prone and makes the onboarding new staff less efficient without a firm set of guidelines which the full department follows.

Lack of control in accounts payable opens the door for potentially fraudulent activities and security risks. Without the oversight offered by a single and streamlined system of governance, it is possible to miss tell-tale signs of any fraudulent behavior and security breach within the process.

Automating accounts payable enforces strict adherence to guidelines, keeping all invoices and transactions under the scope of business’ review, and putting your AP under control.

Author's Bio: 

Marissa Levin is a marketing consultant, freelance writer at SutiAP, who regularly writes articles on Business, Finance, ERP, and Cloud/SaaS trends