Every business needs a strong accounts payable department. AP teams are in charge of maintaining accurate records, making on-time supplier payments, and avoiding unforeseen costs.
To manage and pay invoices, your accounts payable staff must, however, rely on manual invoice processing, which presents a number of difficulties, for example timely processing, misplaced invoices or vulnerable to fraud. These problems occur because manually processing invoices is time-consuming and prone to mistakes.
But there is a better approach. In order to save time and money, we’ll look at the difficulties of manually processing invoices and why an automated system can help.
No more lost invoices, data-entry errors, accounts put on hold in error, lost VAT reclaims or unnecessary over-payments.
1. Errors in Manual Data Entry
No matter how competent your workforce, there will inevitably be instances of human error. You might be alarmed to discover that there are more inaccuracies in your data than you’d expect if you’re still using manual accounts payable methods. Between underpayment of invoices, overpayment of invoices, payment delays and a variety of other issues, your company may encounter unnecessary financial difficulties.
In addition, manual data entry consumes resources throughout your business that could be put to better use. You can save time and money by automating this process using scanning and other data transfer technologies. The automated process eliminates the need for manual data entry and reduces the likelihood of errors.
Many automated systems, like SmartOffice Accounts Payable Automation, work with three-way matching as a common threshold.
Before payment is authorised, the purchase order, the goods receipt note, and the supplier’s invoice must all be inspected and matched by the smart software. Three-way matching identifies differences among these documents and alerts the user of anomalies – saving you time and money and reducing the instance of errors.
2. Unable to Store and Manage Information
The accounts payable department processes a large volume of data each day. Purchase orders, Goods Receipts Notes, Credit notes, Invoices, and recurring utility bills, as well as a broad range of other documents need to be reviewed frequently. The task of manually trying to keep track of and archiving these documents is time consuming and can be stressful.
You may find it difficult to create simple reports or to double-check crucial information if your company doesn’t have a reliable information management system in place for your accounts payable data.
Manual accounts payable processes can result in the loss and misplacing of physical documents, making the accounts process even more laborious. It can therefore require time and resources that you don’t have.
An automated accounts payable process takes all the hassle out of the storage and search of your company’s documentation. At the click of a button, you can find the documents you need – all stored digitally, safely and within reach of your entire team. Access to documents can be decided based on business requirements and can be easily managed and controlled. Whoever needs to review documents can do so from the office, offsite at another location or when on the road.
3. Slow Approval Processing
Any AP process must include the approval of invoices. Invoices won’t and can’t be paid without it. These procedures are intended to safeguard the business and help in preventing theft, fraud, and other potential issues.
By only working with manual processes, approvals remain a time-consuming task that slows down the accounts department and can result in delayed payments.
Delays mean suppliers can become frustrated, their cash flow is harmed, and your relationship with them is impacted. You can even be required to pay fines depending on payment dates and deadlines. Additionally, stress on your accounts payable employees can increase and duplicate their workload.
While there are actions you can take to reduce manual processes, such as enhancing departmental cooperation and predicting future payments, human error will always happen if invoices are managed manually.
The solution? An automated Accounts Payable process.
4. Vulnerability to Fraud
Fraud is unfortunately common in manual accounts payable procedures. From cheque fraud and unauthorised purchases to invoices that don’t match purchase orders all increase the costs your company has to incur.
Cash embezzlement, fraudulent payments, and financial statement manipulation are other examples of internal fraud cases that might be seen in a business and go undetected. External fraud cases are conducted by third parties with “phishing” being a typical tactic. Increasingly frequent cyberattacks are a result of the shift to a digital-first economy in recent years.
One of the more popular scams involves a con artist emailing a worker while pretending to be a senior official from the company, mimicking a company email address. The email instructs the staff member on how to provide customer data or approve a payment. Employees are frequently taken advantage of in this way as the scam is designed to look as authentic as possible; and in the busy business world, these can pass through unnoticed.
The instances where this type of fraud goes undetected corresponds to situations where the process is highly manual. Where many people participate in various stages of the payments process, uncertainly can prevail. Fewer people managing the accounts makes it easier to retain control and keep the process slick. An automated accounts payable process can be easily managed by a smaller number of people regardless of the scale of the AP department.
5. Lack of Visibility
For tight financial control, you must always be able to follow the status of payments issued by the company. When was the bill sent out? When was the money transferred? Has it been deposited into your supplier’s bank account?
It can be quite challenging to manage payments throughout the entire process if your company is still using paper records, not to mention the challenges of providing that information to suppliers and other people.
On the other hand, putting in place an automated finance system offers a greater degree of visibility and makes it simple to follow your payments throughout . With full control and insight over the entire AP process, your accounts team can make smarter decisions.
Additionally, an automated systems means that your documents are all stored in one secure, central location. Loss or damage of computers, accidents and company staff leaving can all pose a threat to the accounts payable process. The search for invoices, bills and payments is simplified by a system that stores essential information in one location.
Automating your process cuts down on business disruptions, a key component of protecting your company. This helps you to run an effective, dependable, and successful business.
It can be a nightmare to deal with the difficulties brought on by manual accounts payment processes.
Your entire accounts payable function can be enhanced by choosing SmartOffice Accounts Payable Solution and availing of reliable digital technology.
Our Accounts Payable solution will automate your accounts payable function:
- Channel all invoices & statements into a designated email account.
- Extract data from invoices such as amount, date, supplier name or code and forward them to the appropriate person for approval.
- Match invoice details with Purchase Orders (POs) or Goods Received Notices (GRNs) and automatically inform suppliers of any discrepancies
- Reconcile invoice amounts with Supplier Statements
- Securely Store invoices and statements electronically for the required 7 years with a quick and easy retrieval facility.
We process the supplier invoice that was received through email and upload it directly to your accounts package. There is no need to match invoices to the relevant purchase orders, print invoices, forward them for approval, or filter through mails. Make your time work for you.
Book Your Free Demo Now
We do more than just Accounts Payable Automation solutions
As part of the Cantec Group, Docutec are the leading printer suppliers Ireland has that sell products such as business printers, Canon multifunction printers, office photocopier printers, large format printers, office printers, document scanners and high volume printers.
Interested In More Blogs?
If you are interested in reading more blogs written by our team, we have plenty of options. Have you recently set up a company and looking to find out how to choose a print for a small printer? Then we have the perfect article for you. Or maybe you have been in business for decades and are looking to learn about the advantages of cloud storage? We encounter this daily and love to share our knowledge through these blogs.
The advantages of office automation are an area we are questioned about every week as it is the heart of our business. Once we explain the benefits, dozens of businesses sign up, resulting in saved rime, money, and resources. To find out more about other areas of our business, click on the blog section and read away.