With Accounts Payable, a resonating fact persists: the longer you take to process an invoice, the higher the cost is affecting the firm’s pocket in the most unwanted manner.
Mistakes in accounts payable can lead to:
- Overpayments
- Missing the payments or paying twice to one party
- Unwanted penalties
- Worsening relationship between vendors in a longer run
Inefficient handling of accounts payable can push the firm into various unwanted circumstances that can end up feeling like a dead weight. The complicated area is the difficulty in navigating such problems as it is only visible once the whole section goes into the radar. But, you have the option not to let the situation get worse.
So, what are the common accounts payable problems? Can we mitigate them? What’s the process like? Let’s look at the issues and all possible solutions to handle them.
Delay in payments
Delayed payments is one of the most common problems faced by almost all businesses at some point in time. The most probable reason for such instances is due to lagging invoice process, an ill-functioning Accounts Payable or an unorganised workflow, avoidance in correcting manual errors and various others. It can often lead to a bitter relationship with the vendor and repercussions in the due sum.
But, all these problems are capable of meeting possible solutions by identifying the real cause and making an attempt to fill the gaps in the persisting process.
Some basic methods include:
- Support of OCR for data entry
- Dissolving missing invoices through the adoption of e-invoicing processes
- Paving the way for approval process by reducing tough points
Inconsistent payment processing errors
When the accounting operations are taken manually, even proper consistency and organisation of the data can lead to errors. Among all manual accounting processes, delayed payment is likely to increase the risk of excess payment issues and double transfer leading to an inconsistent approach.
A reasonable solution to this problem is automating the accounting system or outsourcing your accounts payable to locally available efficient accounting firms.
Financial Fraud
If reports are to be believed, every year, businesses across the globe suffer a $7 billion loss through fraud, especially sectioned in the Accounts Payable process. There are variously internal and external fraud threats when the accounts are handled manually due to a lack of visibility and extra transparent audit.
Common frauds include:
- Duplicate billing through false invoices
- Payments that stand unauthorised
- Accounting report tampering
- Ways to keep a check on frauds rely on:
- Improved visibility
- Analysing the history of the payment vendor
- Checking the frequency and threshold of the payable amount
- Automating to digitised accounting solutions
- Outsourcing the task to a body that ensures safer management.
FinBridge is your accounting partner enabling all tax and accounting service execution with precise efficiency. Outsource your accounts payable and other key finance function areas to experience efficiency and security in all data processes.