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!

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