5 Signs That Tell You Accounts Payable Process Improvements Are Needed!

Feedback is great, just not from your mom!

Sometimes as we walk through life we can glean subtle feedback (or not so subtle, as in any mom’s case) of things that we need to correct.  Certainly, this extends to how we live, work, and play, and it’s a good thing.  Sometimes we need to be on guard for how we communicate with others (live), or how we need to lead by example (work), or how we need to improve a specific skill set in a sport or hobby (play).  Most of the time, if this is coming from someone with the right heart, in a kind way, we can use it to our advantage to make adjustments where appropriate and enjoy increased success in any of the pertinent areas.  However, at other times, there are indicators that are as plain as the nose on your face and it’s no different when it comes to your Accounts Payable process.

5 Critical Signs That You Can’t Ignore In Your Accounts Payable Process

Late payments

If you’re sloppy in your Accounts Payable process, chances are it’s taking an excessive time to process invoices from receipt to posting, and ultimately payments are getting paid late.  The real problem here besides the inconvenience to your supplier is that you’ll be getting penalized a nice little chunk for missing your previously agreed upon vendor terms.  This is a no-no and is avoidable when you utilize dashboards to monitor your process dynamically.  Don’t have dashboards...that’s a travesty!

Paper

Despite the digitization of many invoices as PDFs in recent years, paper still dominates the American Accounts Payable process with nearly 81% of invoices entering AP departments as physical paper or PDF (digital paper, which end up getting printed out and then processed as an invoice, though this time with the output cost onus upon the recipient, not the vendor as an added benefit (not)).  If you’ve got tons of paper being pushed around the bigger implication is the limited visibility into the process and time it takes to push invoices through from end to end.

Manual search and retrieval

This may not be on a daily basis, but certainly when you’re managing vendor relationships, it’s something that will come up time and again.  And for those grappling with paper as said above, it’s inevitable that you’ll be digging invoices, credit memos, and other documents out of filing cabinets and storage boxes.  This is a pain for obvious reasons, and an unnecessary distraction and time suck that can be remedied through an EDM system.

Data entry

This point presupposes that invoice processing apart from things like EDI or OCR requires data entry to integrate information from disparate systems.  Data is conveyed on invoices from the vendor’s system to the purchaser’s system and is reconciled via the AP department.  Unfortunately, data entry means lots of time and potential errors.  If you’ve got tons of this going on, it can be difficult to scale and can lead to errors in payment amounts or incorrect vendors.

Manual accruals

If you’re calling into department heads at the end of each monthly period to get a handle on ballpark spending that is out there but yet to be on the books, you’re navigating blind.  However, this can be fixed by updating your Accounts Payable process to make all invoice data available the moment it is received in your organization in whatever format it comes in.  This is the whole reason we advocate immediate data conversion and cleansing from the process outset.  It solves many problems and enables smooth processing.

So what?

Now, great you say, I can identify with one or more of these items, but what to do about it?  Good question, to which our reply would be...consider document process outsourcing.  It’s an approach that enables companies of all sizes to leverage best-in-class technologies in the cloud (low transactional cost with limited capital investment) and blends human intelligence to maximize results, with the added benefit of requiring minimal IT support and virtually no maintenance from a technical perspective.

If you would like to learn more, click here to schedule a free demo of our powerful AP Automation Software, APSmart.