How to Completely Change Accounts Payable
An Intelligent Solution to Problems Plaguing A/P
Drowning in invoices is a far more common problem than people realize. Businesses need to regularly make purchases to function, and invoices for these purchases can add up. But processing invoices can be a complex, overwhelming task that can get tangled up in other workflows.
If not managed properly, failures in accounts payable can wreck a business, creating supply chain issues while spiking costs. Luckily, there are several simple solutions you can easily implement to eliminate many of the problems plaguing your Accounts Payable department.
Challenges That Accounts Payable Faces
While Accounts Payable may seem like a straightforward department, they’re often plagued with inefficiencies that bog down their systems, making it near impossible to complete tasks on time. These slowdowns open the door for lost advantages and costly errors. However, they’re not usually the fault of AP departments, but rather, ineffective systems.
Accounts Payable’s responsibility goes beyond simply paying vendors. They need to authorize purchases because failing to do so can result in overspending that leads to rippling side-effects, potentially damaging a business. As a result, they need to check orders to ensure that they receive the right quality, amount, and type of goods needed. And they need to prevent unauthorized purchases and fraud from occurring. This means verifying invoices based on company rules and regulations.
Data Entry Errors
At the core of both common and detrimental challenges that Accounts Payable face, data entry errors are number 1 on the list. Manual entry is the most common reason for data entry errors. In fact, it’s so common that 88% of Excel spreadsheets have errors in them. Small entries can add up, costing businesses time and money when trying to correct them or dealing with the fallout.
Not going digital creates massive problems for AP. There’s the cost of printing off invoices, the time it takes to manually transfer invoices to the correct department for verification and authorization, and the filing and retrieval of paper invoices.
Companies that rely on paper invoices often perform at the bottom end of the spending average to process each invoice. And the difference is HUGE: bottom performers spend on average $12.44 per invoice while top performers only spend around $4.98.
Losing an invoice can cost businesses huge savings. Rather than receiving an early pay discount, a company can end up paying late fees or interest on invoices. Worse, they can damage relationships with vendors, forcing them to seek alternatives. Contacting suppliers and asking them to resend invoices only costs more time and increases costs as well.
Unnecessarily Complex Processing
As an organization grows, its processes must grow with it. Starting out, a company might process invoices as they come in ways that vary from employee to employee. But there comes a point where AP needs consistency. Collecting, verifying, approving, and processing needs to be uniform to streamline the process, otherwise, efficiency will drastically decrease.
Anytime someone on your staff manually processes an invoice, there is a potential for waste. That’s because there are numerous ways that waste can occur during invoice processing. Duplicate payments, erroneous entries, missed payments, manually processing invoices, and fraud are a few examples of how your company can lose money through inefficient invoice processing.
Lack of Transparency
Manual processes and stacks paperwork ultimately leads to data siloes. These siloes break up transparency in your business, making it harder to fully analyze company spending. Retrieving records and details can also be a time-consuming task. No matter how efficient a manual system is, it will require someone to go in and find the information requested. As time goes on, this system will break down due to its inherent limitations.
The Secret to Optimizing Accounts Payable
Your business deserves a streamlined accounts payable process that reduces touchpoints. Too many businesses fail to see the advantage in optimizing their AP department, missing clear benefits. With fewer errors, faster processing times, and more transparency, your organization can cut costs.
But it goes beyond costs. You’ll remain reliable while building better relationships with your vendors, securing your supply chains and opening your organization up to increased savings. Luckily, there’s an easy solution that you can rapidly implement in your organization, allowing you to see results quickly: automation.
The Benefits of Accounts Processing Automation
Digitizing AP through automation frees up resources while reducing errors. Manual data entry is often the cause of costly mistakes. And every touchpoint creates the possibility for errors, inefficiencies, and security concerns. In other words, manually processing invoices leads to waste. Automation cuts through that waste, speeding up invoice processing time while providing a transparent picture of your entire organization.
By implementing automation in your Accounts Payable department, you’ll completely change how invoices are processed, freeing up valuable resources for your business.
Streamline Accounts Payable with Low-Code Solutions
Whatever the size of your business, low-code platforms provide a quick and easy way to set up workflows that allow you to streamline practices. By definition, they require minimal coding and therefore minimal IT spend. Businesses can use their visually appealing interface to build and connect processes that allow for the collection and processing of data.
Seamlessly process invoices with precision using a low-code platform. Experience transparency like never before as you watch invoice processing times drop from weeks to a handful of days. Reduce waste. Strengthen vendor relationships. Achieve results.
Quandary Consulting Group leverages the power of Quick Base and Workato to help organizations build the low-code applications and integrations needed to streamline businesses. We take a business-centric approach, creating a roadmap for your organization that minimizes cost and maximizes ROI. And with a 100% approval rate, our results speak for themselves.
For more information on how you can quickly set up AP automations without excessive costs or onboarding, contact us today.
- Process Improvement