When you use a manual accounts payable (AP) process, it’s very easy to make mistakes or spend valuable time and resources just to get payments out the door on time.
Not to mention, you probably don't have real-time insight into your cash flow and true financial position.
But imagine an AP department with clean desks, no paper invoices or checks to cut, and a regular eight-hour workday...even during close.
We live in a world where nearly everything is digital, yet in many organizations, the AP department hasn’t caught up.
According to the Association of Financial Professionals, e-invoicing has only been adopted by 25% of suppliers – meaning 75% of suppliers are still sending out paper invoices.
The bottom line is that processing paper costs more. Manual AP processes can harbor hidden costs such as time, productivity and wages – ultimately adding to the amount of work your AP department is doing to get payments out the door on time.
If you’re experiencing any of the following AP pitfalls, then it’s time for a change!
You’re unable to capture data trends across spending.
Storing Invoices Elsewhere
Archaic storage systems dramatically increase audit risk and reduce negotiation position with vendors because of the difficulty of tracking back payments.
Emailing for Approvals
Emailing to follow-up on missing approvals takes time and increases the odds of late payments due to invoices sitting in someone's inbox or going missing altogether. Not to mention the challenges of keeping that audit trail together!
No Mobile Access for Approvers
Getting the attention of an approval manager is hard enough, and without mobile access there is a slim chance of them responding quickly to an approval request – holding up the approval timeline
Paper Checks and Payment Fraud
Payments are the last piece of the AP puzzle. According to the 2020 AFP payments Fraud and Control Survey, paper checks remain a top target for attempted and actual fraud, with 74% of organizations reporting an instance.
Missing discounts because you are making payments at the last minute.
An automated spend platform eliminates paper and can help protect your bottom line from those hidden AP costs before, during and after spending happens.
Here's how an automated system helps solve each of those pesky pitfalls...
Pushing Paper — An automated spend management platform should digitize the AP process from start to finish, freeing up your team’s time for more strategic work. Invoices are received, scanned with Optical Character Recognition (OCR) technology, and verified prior to entering your system – so you can rest assured that you get the right data into the workflow from the very beginning.
Storing Invoices Elsewhere — Paper filing cabinets and disparate financial systems make it difficult to see the full picture of your spending and are a hassle to maintain. You should keep the payment package together in one system – from the invoice to the approvals to the audit trail – and the next time there’s an audit, you’ll be ready.
Emailing for Approvals — An automated spend management solution should include built-in reminders and help escalate missing approvals, which is especially important when time is short during month-end close. Automatic reminders and escalations help take the burden off of your overworked AP staff during peak times and help prevent invoices from piling up at the end of the month.
No Mobile Access for Approvers — Getting the attention of an approving manager is hard enough as it is. Why make it harder for them to respond quickly to an approval request? An automated and secure spend management platform that offers an intuitive mobile app makes it easy for managers to approve those pesky invoices on-the-go, and they will be more likely to approve on time.
Paper Checks and Payment Fraud — Even if you have the entire AP workflow streamlined and automated, the question remains...how do you pay your vendors? If the answer is with postage and printed checks, not only is this process inefficient, but your institution could be exposing itself to potential fraud. Imagine if you could select payments from your accounting system and direct them to “pay” instead of “print.” When payments are integrated into your e-payment software application, they can be reviewed and routed to treasury approvers before being transmitted to vendors, reducing the risk of fraud.
Missing Discounts — Because processing e-payments is much faster than paper checks, your organization can take advantage of early payment discounts. Payments are the last piece of the AP automation puzzle, and it’s important not to forget about them as a part of your end-to-end solution.
An automated spend management platform that eliminates paper can help protect your bottom line from these hidden costs of AP.
Meridian Partners has easy to implement solutions from top tier vendors that work with just about every enterprise system or as a standalone. We welcome the opportunity to show you how AP Automation is a huge win with a fast and positive ROI for most organizations.
Contact us for a free consultation to see how we can help you improve your AP processes. You will be glad you did!
Meridian Partners is a minority owned company and SBA-certified 8(a) leader in providing Enterprise Resource Planning (ERP), Business Intelligence, and Budgeting solutions. Meridian helps organizations maximize business processes to be more agile, efficient, and transparent through the optimization of their enterprise systems.