An Accounts Payable Puzzle – Finding the Missing Piece to Your Accounting System
Accounting Systems have become invaluable resources for tracking accounting data. But while all the essential information can be collected, analyzed, managed and stored, there’s still a huge piece of the puzzle that’s missing when it comes to the payment process. Unfortunately, these systems aren’t necessarily equipped to handle in-depth payables and payment operations that are often the final piece of a complex puzzle, and so the heavy lifting remains a labor-intensive and costly function.
The complexities of the AP process which include managing relationships with multiple banks, deciphering payment terms, addressing supplier diversity, overseeing compliance controls and fraud prevention, are what keep the headcounts on AP teams high. With these tasks comes an endless onslaught of manual labor from data entry and bank interface management to chasing down approvals and performing line-by-line reconciliations.
These are all challenges managed by AP teams, CFOs and Controllers that most accounting systems don’t manage well without the help of an AP partner.
Inconsistencies in the payables process are the single most preventable cause of errors particularly in regards to global payments. The problem isn’t the payment itself but rather how payment details are collected and how the payment is sent. To ensure proper communication of information, reduce the risk of fraud, manage multiple payment tracks across banking partners, and handle the legalities of domestic versus international processing, companies are hiring more people to oversee the AP process in an attempt to mediate costly errors. Even with the implementation of accounting systems and a more robust AP team, error rates are unavoidable because of the unique inconsistencies seen in each payment.
It may seem that data entry and mailing checks wouldn’t require a highly specialized staff, and many organizations do attempt to keep their overhead costs down by hiring inexperienced workers to perform these seemingly menial task. However, highly sensitive supplier data and banking guidelines combined with increasing IRS audit activity can spell trouble if the responsibility is put into the wrong hands.
A Better Outlook
The ability to transform the accounts payable process into a revenue-generating and scalable operation is possible and it doesn’t have to be a reactive afterthought. With the integration of an innovative payments platform, the overarching corporate goals can be aligned with a specific payables strategy that supports rapid growth. It requires a simple shift toward automation that eliminates the mentality associated with payment runs and replaces it with hard finance results as the motivating factor.
The Missing Piece
An automated solution that works with an accounting system to fully complete the payables process is the missing piece to a complex puzzle. The payables process includes dozens of different reciprocal processes and your AP solutions needs to adopt this integrated philosophy as well. Utilizing the ERP with an intuitive and automated AP component gives power to smarter supplier onboarding, detailed and consistent data collection, streamlined workflows surrounding payment delivery and domestic versus cross-border compliance, as well as innate defenses against fraud-inducing human error.
The payables automation component can be easily integrated to deliver a more modern and successful ERP experience and is the final piece to the B2B payments puzzle.