Increasing Quality Control in Accounts Payable

By iPayables | March 12, 2017

In today’s accounts payable department, concise financial reporting is crucial. A poorly reported accounts payable department can result in omitted liabilities, understated expenses, and a shortfall in supplies to the customer. Errors in manual reporting may result in fraudulent activity being overlooked and duplicate payments being made on invoices, resulting in an account imbalance. The more human agencies that are involved in the purchase order to payment process, the greater the risk of such inaccuracies.

Since the relationship between working capital and payment of invoices is tighter today than it was before, manual reporting can no longer keep up with the newer demands placed on accounts payable. Manual accounting and spreadsheets are an archaic method of reporting that is no longer effective.

Research shows that businesses are becoming enlightened to the need for greater quality control in accounts payable. According to research done by Aberdeen Group, data quality ranks highly as a concern for business executives. The results of this research can be found in an article titled “Drowning in Report Preparations? Let Automation Keep You Afloat” by Keir Walker, Senior Research Associate of Aberdeen Group.

The Superlative Advantage of Automation in AP Reporting

Accounts payable executives would like to have greater visibility of the workflow in their own department, to attain better control and greater accountability. Accounts payable automation allows real-time access to every part of the process as it is occurring. Task progress can be monitored from start to finish, with a better understanding of the time it will take to complete each task.

Frequent internal audits are often necessary for greater control of accounts payable reporting. If auditing is not done correctly, minor problems can develop into major headaches. Relationships with vendors could be affected, and opportunities to save money through early payment of invoices could be ignored. Daily archiving in electronic invoicing allows for more frequent, more accurate reporting, leading to better audits.

Accounts payable automation makes use of dynamic discounting to capture early discounts on a per vendor basis. Valuable data is acquired on vendors that can be used to better define the goals that the accounts payable department would like to achieve during the course of a year. Reports can be generated automatically at given intervals, and used to provide spending forecasts, leading to better-stated financial goals that are more clearly understood by everyone involved.

Because much of the data generated in accounts payable is repetitive, discrepancies that occur between purchase order and invoice can be highlighted electronically and dealt with in the moment. Fraudulent activity is therefore drastically reduced, as are such common errors as duplicate payments or overpayment of invoices. Financial information can be stored in the cloud, leading to better security and less chance of data loss. Accounts payable software is an integrated system that flows seamlessly with other popular accounting systems already in use, making adaptation easier for the average company.

Greater quality control has been recognized as one of the greatest needs in today’s accounts payable department, and E-invoicing has been created to answer that need.

Referenced Article:

“Drowning In Report Preparations? Let Automation Keep You Afloat”: Keir Walker: December 2016

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