Top Three Scariest Accounts Payable Problems: From Errors to Late Payments

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Dealing with accounts payable is a true challenge for accounting departments, especially in a time when business finances are more complex than ever. Even so, you may still insist on using paper for accounts payable procedures since it’s something you and your staff have always done. After doing the same procedures for years (or decades), it can become hard to make a change.

If you’re starting to notice more mistakes in your finances, you shouldn’t assume it’s going to get any better. As your business grows, more complexities may start to arise in orders and payments. Relying on a paper-based system only leads to major problems that can lead to internal blame games and downtime.

Let’s look at the top three scariest accounts payable problems

1. Accuracy and Errors

There isn’t any bigger problem than having inaccurate records and errors in each accounts payable form. Even worse is when those invoices coming in suddenly go missing. This can lead to a million questions, like did the vendor send in the invoice through other means, or maybe it was never received?

It’s an example of how manual accounts payable records lead to more confusion and potential finger-pointing within your office. When something as important as invoices turn up missing, it can lead to numerous people getting the blame, which only instigates internal discord.

The same goes with errors an accountant makes in manual processing. Once an error gets out in paying an invoice, it could stay in the database for months without being noticed. These errors could affect many things down the road like false budget forecasts, and having to make corrections on tax returns.

2. Inefficiencies in Managing Accounts Payable

Sticking with paper, it means far more inefficiencies in managing time within your office. Paper invoices get sent to various departments that need the information to maintain company clarity. Doing it this way only leads to slowdowns in getting the invoices processed and in making team decisions.

With invoices piling up, these slowdowns in communication only cost you more money in the process. Passing these invoices from department to department can even lead to distorted information or lost documents once again.

3. Missed Due Dates and Late Payments

Equally bad as the above problems is missing a due date or making a late payment. When working with vendors, they expect to receive payments on time. They may grow exasperated with you if you keep having to tell them you lost invoices, or just missed a few due to disorganization.

There isn’t any excuse in having this continually happen. Constant late payments can lead to experiencing late fees, which only cuts into your budget. Your vendor may also want to cut ties with you if late payments continue without a solution.

To learn how to secure AP invoicing cost savings of up to 80%, drastically reduce your rate of invoice exceptions, gain significantly more early payment discounts, and simplify workflow for every AP stakeholder, download our AP Field Guide eBook. No backpack or walking stick required for this adventure!

The 7 Essential KPIs of Accounts Payable

Today, everything seems to be going electronic. Everyone is performing activities virtually — which in most cases is meant to make our lives easier. However, Accounts Payable (AP) seems to be stuck in neutral. A recent study found that paper-based invoices still make up 90% of total invoice volume for a majority of AP departments.

You Want to Improve Your Accounts Payable Processes — But How?

While your AP department stresses with paper shuffling and the management of all of those hard copies of invoices, it can be hard to find the time to sit down and assess where the true issues are. What are your biggest obstacles? What area creates the worst detriment to your department? The truth is, in order to make improvements your analysis has to start somewhere.

The 7 Key KPIs of Accounts Payable

Thankfully, here is your headstart. This SlideShare will give you the 7 essential key performance indicators (KPIs) that will allow you to identify your troubling AP habits and trends, so that you can evaluate how your processes stack up to industry benchmarks. Start your number crunching with these KPIs and begin your quest to AP excellence.

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The 7 Essential KPIs of Accounts Payable

Identify your troubling AP habits and trends so that you can evaluate how your processes stack up to industry benchmarks down the road.

  1. Measure the number of invoices processed per employee (or per month). This metric can change impressively after applying better processing methods.
  2. Measure the processing cost of each invoice. Start to add up such costs for just one invoice, and you have yourself one expensive AP process. What metrics should you be aiming for? Check out this video from Taulia on the average cost per invoice to set your benchmarks.
  3. Measure the timeliness of your payments.
  4. Measure your captured discounts.…If you have any.
  5. Level of automation already implemented… sorry, email doesn’t count as automation…
  6. Document the number of duplicated invoices detected…or “quad-uplicated” invoices…
  7. Measure the percentage of duplicated invoices captured.

ECOGAS Boosts Vendor Collaboration with Esker’s Cloud-Based AP Automation Solution

Sydney, Australia — March 9, 2016 — Esker, a worldwide leader in document process automation solutions and pioneer in cloud computing, today announced it is working with ECOGAS, the second largest natural gas distributor in Argentina, to automate its accounts payable (AP) processes into the company’s SAP® software system.

Servicing roughly 400 active vendors with 40,000 annual invoices, ECOGAS turned to Esker’s cloud- based Accounts Payable automation solution to improve its processes by reducing time spent on manual tasks and increasing control and visibility over the entire workflow.

Esker’s cloud-based solution allows its vendors to upload invoices within a portal where invoice data isautomatically captured and checked against Argentina’s Government Tax System -revolutionising communication within ECOGAS’ AP department.

 

A user of SAP for the past 15 years, ECOGAS selected the Esker’s cloud-based solution for several reasons. “The solution we were searching for needed to be robust,” stated Gonzalo Cohen, Finance Leader at ECOGAS. “At the foundation, it needed to integrate with our existing SAP system, leverage OCR technology, allow for vendor collaboration and have a significant set of features specifically tailored to the Argentina market. Luckily, we found Esker, who was able to give us all that and more.”

Enhanced Collaboration

To ECOGAS, one of the most important facets of the solution was the ability to collaborate with vendors. Esker’s online portal provides a self-service solution to vendors which allows the company to:

  • Save time and money previously spent responding to invoice status calls
  • Reduce repetitive tasks associated with managing receiving and dispatching invoices
  • Increase process visibility with real-time tracking of all invoices

The portal feature also benefits its vendors, who are able to utilize it for:

  • Immediate access to invoice status
  • Self-service access to payment information
  • Instant communication to quickly clear up discrepancies
  • Quicker payment and improved cash flow

Heightened Control & Visibility

Esker’s customisable dashboards provide ECOGAS with the visibility and control it needs to better manage its AP department. Now, it can measure the department’s efficiency through metrics and Key Performance Indicators (KPIs) such as: invoices pending approval, budget control and forecasts, and Days Payable Outstanding (DPO).

About ECOGAS

For over 20 years ECOGAS has been distributing natural gas to homes and Businesses in Argentina. A privately owned company regulated by the government, ECOGAS provides services to over 1,250,000 customers within 254 markets through over 18,000 miles of infrastructure networks and pipelines.