5 Signs You’ve Outgrown Your Accounts Payable Process – and What to Do Next
May 5, 2021
Estimated Reading Time: 4 minutes
Cloud technology has changed the face of accounting – is your team still playing catch up?
For accountants, getting an invoice approved on time or paying vendors before a looming deadline is always a clear win – but for most finance teams, the reality isn’t that simple.
As CFOs everywhere close the books on a rocky fiscal year, their tech capabilities are being put to the test. Global oil company Chevron tried preparing for this by setting up dry runs to examine their remote closing efficiency.
While that tactic may not be feasible for all, there are other ways to evaluate whether or not your current accounts payable processes should be put to bed.
Too many cooks in the kitchen
Are you using more than one system to manage your financial data? Perhaps you’re using a document management system for invoices and spreadsheets to store the numbers. Whatever the case, working with too many platforms can be frustrating and lead to errors. As your business operations expand, it can be hard for the accounting team to maintain the influx of data and stay on top of deadlines.
Beanworks can automate all four AP workflows – invoices, purchase orders, payments, and expenses – so you don’t have to switch between systems. The entire process is centralized, giving you a 360-degree AP experience. Users can access the system in real-time, saving your team the trouble of following up with managers or constantly updating multiple systems.
The problem with paper
If you’re still pushing paper, and the stacks of invoices keep piling up, your current AP could be an unnecessary waste of money. Most businesses have no idea that manually processing just one invoice can cost as much as USD $15 (and even more if there’s a data entry error). And when you factor in office space, rent and maintenance, storage costs can be the final straw.
As your business operations expand, it can be hard for the accounting team to maintain the influx of data and stay on top of deadlines.
Automation helps teams reduce this cost to an average of USD $2 per invoice. Let’s say your company is handling 500 invoices per month – that is an annual savings of USD $78,000.
Workflows (like expense management or invoice approvals) that tend to be paper-heavy also become fully digitized with cloud technology. Employees can take a picture of their receipts and submit them through their phones without creating an avoidable trail of paper. Likewise, approvers can easily sign off on purchases from their phones.
AP’s biggest time-consuming task is data entry, which inevitably leads to mistakes. Whether it’s matching POs, processing invoices, managing expenses or paying vendors, there’s a lot of information that needs to be entered carefully. Without proper tools and technology, accountants spend most of their time fixing their own key mistakes.
At Beanworks, we provide safeguards for catching errors such as duplicate payments, meaning incidents are much easier to avoid. Our AI-powered data capture automatically picks up invoice details including line items, header information, and the total amount – saving your AP team a significant amount of time.
Last year, almost 43% of invoices in North America were not paid by their deadline; for most companies, that’s 30 days. If the payment timeline for your vendors hasn’t improved, it could be a sign that your AP solution isn’t working efficiently. A lengthy approval cycle is the biggest cause of late payments and early payment discounts. Missing information on invoices, lost invoices, and manual routing are other major causes.
The cycle of chasing approvers and tracking delays increases with multi-level authorizations. But does your team have the right tools to fix the problem?
Replacing checks with electronic payments is an easy fix to avoid delays, and also improves vendor relations. With a centralized digital AP platform, initiating domestic and international payments can be managed from anywhere. Vendors are paid according to their preferred methods such as ACH/EFT or virtual credit cards, protecting companies from risks such as fraudulent payments.
The non-thrill of the chase
The cycle of chasing approvers and tracking delays increases with multi-level authorizations. But does your team have the right tools to fix the problem? The approval process can take a long time – fact. A manager might be sitting on an invoice for a while, but can your AP system tell you how long it’s been with them? Or the reason for the hold-up?
Automation presents a series of features to ensure approvals stay timely and smooth. You can set up customized approvals, where automatic alerts are sent to managers. They can sign-off on invoices through their phone or on the web. If they’re rejecting an invoice, they must specify the reason so the accountant has clarification. This helps reduce or even eliminate approval delays – one company reduced approvals delays by 99% with Beanworks AP automation.
If you recognize any of the above signs, it may be time to find out how Beanworks 360-degree AP solution can enhance your AP experience.
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