Accounts payable solutions in recent years have emerged further thanks to cost optimization rationales, big data concepts, advances in mobility, data mining & cloud technologies, emergence of multiple payment channels, enhanced automation capabilities and growing awareness of green CSR initiatives. All that further adds to the complexity of accounts payable professionals and restrict the potential value generated from AP activities if managed improperly.
Following are the 3 biggest challenges AP professionals are facing nowadays.
Tedious work paired with high error rate
Traditionally, AP processes occupy considerable manpower and man-hours for activities like checking and authorizing source documents (e.g. invoices, receipt notes, statements, emails), posting invoices, entry of payment data into e-banking systems, arranging approval, releasing payments and dealing with vendor disputes.
All these manual steps are subject to errors, increasing costs, payment delays and waste of manpower. Vendor relationships are compromised due to occurrence of payment delays and disputes. Working capital cycles are negatively affected by a lower utilization of credit terms and strain on purchase-to-payment cycles.
Automation of AP activities can release manpower and ensure accuracy and timeliness. Implementing a centralized payment hub supporting multiple payment channels and interfacing with ERP systems can automate a large part of the AP process. Electronic approval workflows will reduce payment delays due to late approval. Sophisticated data capturing technologies help to manage source documents and reduce unnecessary manual data input and ensure standardization of all invoice data from different sources.
Non-transparent AP Process
Successful AP practices do not end with ensuring prompt capturing, approval, posting and payment of invoices. The value of best AP practices also includes the ability to generate business insights from AP processes and systems. To identify the source of problems within the AP process helps to determine underlying trends enabling companies to optimize company processes from an integral perspective.
AP data grows in complexity and at a rapid pace, thus it is a challenge for AP professionals to analyze AP data efficiently by exporting relevant reports and mining key information.
Ability to Audit
The audit trail should remain highly visible for management control and statutory purposes. Process automation activities, outsourcing of non-core AP activities as well as emergence of paperless transaction cycle should not compromise business control. The opposite is the case. Facing stricter internal controls and other statutory measures around the globe further increase the need for transparency throughout AP processes. This can be achieved by providing activity logs and on demand documentation for each process step.
Do you face similar problems? Do you wish you had the time to focus on more important things than manual AP processing? We at ProcessOne are happy to help you identify your potential and to realize it.