Is your manual accounts payable system running you in circles?
FYI, this story is more than a year old
Manual accounts payable (AP) processes are inefficient, costly and increase the risk of inaccurate payments that are not compliant, so why risk it? Concur managing director Matt Goss believes automated accounts payable systems are essential to businesses.
“Speed, accuracy, and compliance are the keys to effective AP processes. Many businesses aren’t even aware of how the process can be streamlined and made more effective; they’re stuck on the AP merry-go-round. It is crucial that they understand where their processes might be falling short to determine how an automated system can help,” says Goss.
Goss believes there are four telltale signs your AP systems are running you in circles.
Concur says that paper invoices are inefficient, can go astray - often landing in the hands of the person who ordered the items, and they can also go out via email and post, increasing the risk of paying duplicates.
Paper invoices also involves an average of fifteen people as it flows (or doesn't flow) through the business, according to theSupplier Invoice Benchmark Report: Exploring the AP landscape in the UK, Vanson Bourne, 2015.
This delays payment process and making it unclear who has the invoice at any one time. Concur says this can damage supplier relationships.
“Businesses can waste time and resources checking the accuracy of all information on the invoices and keying data into spreadsheets or ledgers. This process is open to error,” Goss says.
“If invoices are handled in a haphazard way, the business may be at risk of paying inaccurate or fraudulent invoices, or being late with payments," Goss says.
Reliance on same-day payments
Concur says some businesses will have to fork out for more costly same-day payments to meet deadlines, because they don't have automatic payments set up. Although some of these payments can be claimed as expenses to bypass the delays invoice processes entail, this does prevent the finance team from forecasting anticipated spend across each cost code.
Automatic AP processes are not just email invoices and data capture. Truly automatic AP processes encompass many aspects that can cut out paper entirely, reduce errors and reduce delays. As a result, costs will decrease and businesses will be more compliant with internal policies, Concur says.
“Companies that can effectively automate their AP processes generally can reduce costs through less administrative burden, reducing the chance of erroneous payments, and by negotiating better arrangements with suppliers based on more consistent, on-time payments," Goss concludes.