How AP Automation Makes Audits Less Stressful
That “A” word. Ever notice how just the sight or sound of it makes you feel? It’s like nails scraping on a blackboard.
It shouldn’t be. If your accounts payable department is running on all cylinders, it can be a positive thing. Especially if your company uses AP Automation like iPayables InvoiceWorks®.
The benefits of cutting-edge AP automation are driving companies of every size to switch from paper to electronic invoicing. These benefits range from fewer labor hours to early-pay discounts their AP departments could never qualify for in the past. Other benefits of AP automation become apparent whenever an audit is conducted. To understand why, you first must understand what an AP audit is and what it does.
An independent audit is meant to help your company. An auditor is not there to cause trouble, even though part of their job is to look for it. The auditor’s job is to discover problems that need correcting. Are transactions properly recorded? Do they reflect your business accurately? An audit report should give you a good snapshot of how your company is doing and how it can improve.
A well-conducted audit may reveal nefarious activity. Fraud. Embezzlement. These words will ruin your day a lot faster than the word audit. Invoices that have been tampered with, and phony vendors with fake addresses are just a couple of ways thieves attempt to skim and divert funds. Fraud costs U.S. companies billions every year.
Errors are detected and corrected. Aside from fraud, errors can damage a company now and down the road. Better to find the errors now (before the IRS does, for example) and fix the problem causing it in the first place, so it doesn’t happen again.
Once the auditor is given access to your records, they look for completeness, validity and compliance within your company’s AP records. These will be compared with the disclosed end-of-year AP balance to see if they match up right. Along the way, any red flags will be noted and included in the audit report.
Unfortunately, a job like that can be a nightmare when the records are incomplete, scattered to the four corners of the company or contained in piles of paper. Therefore cutting-edge E-invoicing like iPayables’ InvoiceWorks® is so important for AP audits. AP automation ensures that records, such as invoices and purchase orders, will be complete and contained in digital files that are easily read in real time. These files comprise an audit trail that can be inspected in a fraction of the time – hours as opposed to days or weeks. And the easy data comparison and cross-referencing afforded by AP automation make errors and fraud indicators easier to find.
So, if you’d like to get on better terms with that “A” word, embrace another “A” word: automation, as in accounts payable automation using cutting edge electronic invoicing like InvoiceWorks® from iPayables.