Advances in accounting technology – particularly accounts payable automation systems – have made a variety of efficiency and productivity benefits available to AP teams. At the start of a new year, what accounts payable best practices should your team strive for to improve its overall efficiency and accuracy?
1. Organise and Prioritise
Keeping tabs on when invoices are due to be paid is challenging in a large business which receives hundreds, or thousands of vendors invoices every day. Late payments are a scourge for AP departments, as advantageous discounts can be missed, cash flow visibility is reduced, and relationships with suppliers can sour.
Organising and prioritising invoices is critical to settling accounts at the optimum time, but manual systems leave a wide margin for error. An automated solution, however, makes the entire invoice management system easier to control and deadlines more achievable.
2. Implement Fraud Detection
Fraud, committed by cybercriminals or your own employees, is costly and damaging, and more likely to occur if your AP team manually processes supplier invoices. For this reason, it’s important to take definitive action to minimise the risks to your business.
Automated AP processes ensure that your Accounts Payable systems are robust and rigorous, with a clear and visible audit trail on SAP that withstands scrutiny at any time. With every transaction displayed in real-time and automated three-way matches thoroughly checking every line of every invoice, discrepancies and irregularities are more likely to be flagged and reported for further investigation.
3. Use Key Performance Indicators (KPIs) To Assess Efficiency
Improvements to AP systems can only be identified if you can evaluate current efficiency. Establishing KPIs is crucial when making any alterations to the way the department operates, especially when automation has been introduced.
Metrics you can analyse on SAP include:
- Cost per invoice.
- Number of invoices paid on-time.
- Accuracy of payments.
- Days Payable Outstanding.
- Early payment discounts.
- Time spent managing supplier enquiries or disputes.
4. Safeguard Against Duplicate Payments
Duplicate payments are often being the consequence of human error or mistyped data entries. Where there are large volumes of invoices being processed, the chances of duplication are increased. With automation, duplications will be spotted by the software and flagged for AP staff to check before payment is authorised. Without automated AP, it’s simply not possible for staff to identify every duplicate entry, so persisting with manual invoice management will inevitably result in some payments being made twice.
Contact Cogent Consulting Today
Automating invoice processing will enable you to achieve all of these AP best practices in 2022.
If you’re seeking effective ways to improve your accounts payable process, get in touch with Cogent Consulting. We have many years of experience supporting teams like yours to become more efficient and streamlined, with automation at the heart of AP improvements.
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