The accounts payable section of our business is typically strenuous on our eyes and minds. After a few hours, numbers begin to switch places, things go missing, and we feel like we are losing our minds. A perfect example of why transposition in the most common accounting error. A switch between two digits can cause hours of confusion and miscommunication. Today we’ll be going over the most common mistakes made in accounts payable.
Top Challenges in the AP Process 2021
Constant data entry is bound to create errors. Like we said before, staring at numbers all day will eventually lead to slip-ups. Manually inputting purchase orders and invoices could create more confusion for other parts of your business when it is time to match up your financial documents. By allowing human error to be a disservice to your business, you could mislead the financial reporting section of your company and cause the leaders of your business to make poor decisions based on misinformation.
If a supplier’s invoice is not processed in a timely manner, they might send a second invoice. So now it seems like a fresh invoice, but now you will end up paying it twice. If you are having trouble keeping track of your invoices, consider switching to electronic invoicing to easily match invoices and purchases to ensure accuracy.
Early Invoice Payments Before Receiving Receipts
Sometimes employees in your accounts payable department will approve payment of an invoice before receiving a receipt. If this product has not been properly handled or delivered, you will have an accounts payable headache. Be patient when it comes to processing your paperwork to ensure the validity of your actions.
Delay in Payments
The suppliers you work with expect to have their payments on time. If you constantly have to tell them that you have lost the invoice or the due date, you could incur fees or lose business. Create an accurate schedule and up reminders to when payments are due to stay up to date in your business.
Slow Invoice Processing
Without an accounts payable automation system, it takes an accounts payable clerk one hour to complete 5 invoices. With an automated system, a single clerk can file 30 invoices an hour. Manually inputting invoices creates drag in your business and it can easily be eliminated. Using an automated system also lowers the demand for physical workers and you can be more efficient with fewer workers.
How to Eliminate These Problems
In the year 2021, it seems bizarre that businesses are still manually inputting data and are experiencing these types of errors. Accounts payable automation system eliminates many of the problems we laid out here today. Automation is the way of the future in more aspects of the business than just the accounts payable sector. It increases efficiency, accuracy, and keeps your suppliers satisfied. By eliminating errors you are able to keep your business running smoothly and make other people enjoy working with you.