Challenges faced by Accounts Payable functions
Data capture – Manual data entry takes a lot of time and increases the possibility of errors and manually finding and rectifying errors wastes even more time.
Approval process – Dependency on cumbersome manual processes for passing invoices for approval adds delay and those delays may mean facing late payment penalties or missing early payment discount opportunities.
Maintaining records – It is easy to lose invoices and not notice until the supplier demands payment and as a business scales up, so does the volume of purchase transactions and documents that need to be stored and accessed.
Cash flow management – Difficult to have full and regular visibility with paper-based systems and is not easy to calculate and share current cash status and projections based on invoice payment dates.
Alongside these functions is the need for stakeholder management
Vendor relationship management is vital to maintaining trust, and employee motivation is critical to getting the job done. Late payments are a quick way to lose vendors trust and damage relationships and good relations are vital to securing the best payment terms and lead times. Employees who spend too long on menial tasks are likely to be less motivated and efficient.
Why should Accounts Payable go digital?
Improved visibility Better
Accounts Payable reporting and data analytics to give transparency into transactions and cash flow.
Eliminate paper and manual tasks to reduce invoice processing costs and bring down the error rate and potential for fraud.
Reduce exceptions to normal processes and ensure scalability to cope with business growth and accessibility to staff working remotely.
Keep vendors happy and employees motivated with easier workflows and less time spent on admin.