Accounts payable can be extremely paper heavy.
Modern businesses have a mass of information that has to be tracked, stored and managed, and much of it needs to be dealt with quickly and efficiently like invoices, supplier contacts and enquiries, and accounts filing.
On top of this, larger businesses often have a more complex structure of departments and cost centres, each with somebody responsible for authorising invoices for payment, or at least confirming receipt of goods or service.
This approval process becomes even more complex when there are geographically distributed operations with a central accounting function.
However, if your business is considering replacing its accounting software because the current system is unable to cope with the demands of your accounts payable process, you may want to think again.
Rather than a wholesale replacement of your accounting system, the answer may lie in supplementing accounting software with an automated accounts payable solution.
Do you have an accounts payable processing problem?
If your accounts department is working all hours, but management accounts are often late, with surprises of expenditure from previous reports merging into new ones, you may have a process problem.
Likely the roots of the issue lie in the accounts payable ledger being left open for a long period to deal with supplier invoices not yet posted. Even after this period, your accounts staff then have to spend time researching and accruing for invoices still in flight.
This inevitably leads to your suppliers being paid late and chasing payments, or even stopping supplies while issues are resolved.
Another problem with inefficient payment process is that invoices can be lost or misplaced and unexpectedly turn-up with an urgent need to be paid. Then there are the problems with accuracy and control, which can often get out of hand without robust and efficient processes.
Duplicate documents and payments for instance, can be a significant for commercial challenge for businesses, creating extra work to source the original invoices and payments and then spending time submitting refund requests.
Is an automated accounts payable system the answer?
One of the main advantages of automating your accounts payable system is that it speeds up the processing of invoices and provides visibility from the point they are received in the business.
Implementing accounts payable automation can help you streamline your existing processes whilst also accommodating complexities like a multi-tiered approval process. Resulting in both an improvement in efficiency and control.
Integration and portability
Another significant benefit of accounts payable automation software, is that it can be integrated within a business’ existing ledgers, and is future proof, as the process can also be bolted on to your next generation of ledgers.
You should be able to click through from account detail to posted invoices, and check if your accounts payable automation software includes full document management capabilities to enable visibility of all related documents.
Proven and reliable
Automated accounts payable software has been implemented within businesses for years, and it has been used in many different sectors by many different organisations.
The scope and extent of these projects may vary from business to business, or industry to industry, but many of the principles remain the same.
For example, the project may include the purchase process from requisition to order, and through accounts payable, further automating the purchase ordering and receiving process.
The common theme will be that these projects involve some change management, so it is important to consider the scope and extent of the services required to implement these solutions and the way a vendor will help you manage the change to a digital approach to work.
By implementing an automated accounts payable solution in the correct way, businesses can speed up invoice processing and free up staff to focus more on business growth, rather than chasing documents they have already dealt with once.
Being sure to focus on the underlying accounting problems, rather than being distracted by the symptoms, is the key to optimising accounting software, after this you need to consider if your accounting system need to be supplemented rather than replaced.