Accounting errors and AP automation: there are no small business mistakes
- 14 nov 2019
- Thought leadership
There are no small errors when it comes to accounting and accounts payable. Even a single missed digit can cause a rippling effect. Modern AP automation plays a crucial role in reducing the typical errors associated with manual processing, including vendor contact information and missed payments.
Unfortunately, many of the most common mistakes made in the AP department end up costing businesses significantly. Late payment fees, strained vendor relationships, and missed discount opportunities are all costs that impact the bottom line. Savvy corporate executives are learning innovative ways of using technology to eliminate errors and ensure the highest level of data integrity.
Time is of the Essence
When it comes to saving money, time is of the essence in the AP department. Staying on or ahead of schedule makes it possible to take advantage of discounts, avoid late fees, and maintain positive relationships with suppliers. AP automation puts crucial data at the fingertips of the C-suite and AP team to maximize all opportunities for savings.
AP automation helps organizations save time by reducing the need to perform tedious manual data entry tasks. Plus, automation eliminates inevitable mistakes that occur during manual processing. Without the real-time updates provided by AP automation, businesses can lose money due to small errors such as forgetting to send or pay an invoice on time. Soon these minor mistakes become major losses when vendor relationships are strained or loss. Modern businesses need to operate quickly and accurately to keep up with the pace of the marketplace and the competition.
Watch the Cloud
Cloud AP automation provides updates anytime and anywhere in real-time to take the guesswork out of invoice payment and receipt. Invoices can be approved in minutes rather than the days it took to process approvals manually. Now they can be done remotely to keep the AP department moving forward.
In a security-driven business environment, data integrity and the need for relevant, accurate information is essential to avoid errors such as sending invoices to an old address or failing to update key contact people. Automatic updating saves time and effort while reducing possible errors made when manually updating data and systems.
Common Errors to Avoid
AP professionals learn to recognize common errors to avoid. During manual processing, ongoing thought and effort are required. With AP automation, typical mistakes are avoidable, including:
- Data entry mistakes, such as an incorrect vendor address
- Errors of omission, such as failure to provide a zip code for mailing
- Failure to update and backup the system, leading to time-consuming glitches and possible errors
- Failure to cross-check records and bank accounts to ensure accuracy
- Confusing contractors and employees
Top Errors to Watch For
Beyond the basic mistakes frequently made by AP professionals, consider some of the top errors that are reduced or eliminated by the implementation of AP automation:
- Unclear terms and conditions
- Failure to send invoices to the right department for approval and payment
- Inaccurate data that is outdated or incorrect
- Inexplicable fees
- Ineffective formatting
- Lost/misplaced invoices (bad for audits)
Small mistakes can add up to big money, and the devil is in the details - and data. AP automation features make accuracy easier by providing automated system updates and information as it happens. The management and financial teams gain access to pertinent patterns and benchmarks to help gauge future progress and profits.
Focus on the big effects of small mistakes and how to avoid them by implementing AP automation. The C-suite and AP team must evaluate the cost per invoice to start realizing ongoing savings by adopting automated process. In the months and years ahead organizations will be able to measure the notable difference in the bottom line.