Small Business Accounting
Overcoming Challenges Faced by AP Specialists Using AP Software
I would like to extend the list of some of the challenges faced by AP specialists in handling an organization’s accounts payables that I came across in a recent post. AP software, a web-based application that helps organizations and AP specialists streamline their accounting and improve productivity of those involved, alleviates many of these challenges. Let’s see some of these challenges and how technology helps overcome them:
Processing Time
Invoice processing often takes too much time for the whole process to be efficient. AP specialists must perform many tasks, including checking and validating the invoice at every stage of its lifespan. Since it involves many stakeholders, if one of them is not available, the entire process grinds to a halt. Furthermore, with processing happening only at the office, those people necessary can’t help remotely.
In contrast to all this, AP software carries out this process much more efficiently. It speeds up all aspects of the AP process, from receiving the invoice, getting verification and approvals to sending the report along to the finance team. This also reduces the time each stakeholder spends on completing his or her part of the process. With the time spent on administrative tasks reduced, AP specialists will have more time to spend on more important tasks and ideas to improve the process.
Managing multiple channels of receipt capture
The world is going completely digital fast, but for many organizations, accounts payables is still stuck in the stone age. Not only do they have no way of receiving digital invoices, they still don’t use digitization or automation for invoice management. Digitization offers significant savings in time and effort, as organizations move to digitization they should encourage their vendors to adopt digitization as well.
With AP software, specialists will have the option of capturing invoice data from multiple sources in an automated manner. Invoices can be e-mailed, sent via fax or even on paper, from which data will be automatically scanned and entered into the system through OCR technology. This leads to data being quickly and accurately captured.
Approvals
Approvals can often be the biggest obstacle in the AP process. Absence and an overload of work often leads to approvals never happening on time. This understandably creates a roadblock in the entire process. However, approvals are necessary as they prevent corruption and fraud. Also, if there are any special conditions mandated by the organization’s policy (dual approvals, multiple-level approvals, etc.), the process becomes much more complicated. This can be quite a challenge to manage, especially with so many people and departments involved.
Luckily, approvals become much simpler and quicker after implementing AP Software. It facilitates the entire process in such a way that all stakeholders will find it much easier to manage. Firstly, it automates the delivery and communication aspects, as well as digitizing the process. Pushing paper from one desk to another ceases to be an issue, as it can be done online automatically. After the specialist enters the invoice into the system with the right details, the system alerts the stakeholder who raised the original requisition for approval. Once they approve the invoice, the software triggers an alert for the next person in the approval chain, and so on. This ensures that process gaps do not occur due to lack of communication, so AP specialists just need to monitor the process without involving themselves too much in the routine aspects.
Even dual and multiple-level approvals are made easy with the software. The administrator can program the software to follow the organization’s policy and ensure everything flows correctly.
Fraud
Invoice fraud is one of the biggest challenges that organizations must face, and often struggle to overcome. Like a hydra, when you think that you cut off one source, another seems to spring up. The very nature of the process presents plenty of opportunities for collusion and fraud. Managers might order products and supplies they don’t need for their own personal gain. AP specialists can collude with vendors and inflate invoices or process the same invoice multiple times. Also, requisition managers can collude with vendors to order more or sub-standard quality goods.
To prove fraud, the first thing you need is information, as you need to know everything that is happening. Data and records pertaining to every transaction must be meticulously kept so that audits can be done later. Furthermore, there should be a practice of regular audits to discourage employees taking things lightly. When you do not have a centralized system to store all the data, collating and auditing it later becomes very hard.
Also, you need checks and verification at different steps, usually by a manager. This reduces the chance of ad hoc or maverick spending happening. Additionally, you need a system that checks all invoices carefully to prevent and extinguish duplicates or errors.
Understandably, all of this becomes cumbersome when done manually, which is why online AP software is helpful. It quickly becomes your reliable partner for stopping fraud. It is the repository of all procurement-related data, so all the information you need is at your fingertips. The system also maintains extensive logs, making audits simpler. Further, it automates verification of incoming invoices, which makes identifying duplicates and inconsistencies easier. The software also automates matching, and you can do one-way, two-way and so on. Ultimately, data accuracy is significantly improved with the solution.
Integrations
Accounts payable is only one part of the entire cycle. While you validate payments in this step, someone must do the actual payment. Therefore, it helps to have automatic transfer of data from the AP system to the finance system instead keying in data from one system to another. Automatic data transfer is possible through integration of these disparate solutions. This makes for a comprehensive and effective solution that acts as a platform for all things related to one function. Gone are the standalone applications and data transfer woes – the software does everything automatically.
With AP automation software, organizations enjoy increased collaboration and doing away with silos. It equips AP specialists and other stakeholders involved with the necessary wherewithal to complete their tasks efficiently and seamlessly. All this while also facilitating effective collaboration. In this era of digitization, it is a solution that organizations cannot ignore.
Photo courtesy of Pexels user Martin
