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10 Common Challenges of a Manual or Semi-Automated Accounts Payable Process

January 15, 2021

Accounts Payable Automation has a come a long way since the early days.  Still 85% of an average Accounts Payable Professionals time is spent transacting processing and handling exceptions. Here some common challenges with a manual or semi-automated Accounts Payable process.

  • 1

    Difficulty with Invoice variables

    Difficulty processing invoices with different layouts/designs and various delivery formats – post, fax, email, EDI means lower automated capture rates and more manual work. As volumes, complexity and variable increases, the greater the risk and ultimately cost through manual processing and intervention at some stage.

    This means larger AP teams as well as other indirect costs. For AP teams processing 1000s of invoices a month at up to £25 per invoice, AP can be a real challenge for businesses

  • 2

    Manual Data Entry Errors

    Errors associated with manual data entry or rekeying cause delays in processing and further inefficiencies. Poor capture accuracy, whether automated or manual, causes additional problems and inefficiencies further down the process.

  • 3

    Manual Reconciliation

    Non-standard or custom AP processes create additional labour intensive work i.e Manual reporting, Manual reconciliation without a PO, No form of goods or service verification, workflow integration with other systems, Specific or custom data fields ie GL coding, costs centres, currency conversion etc

  • 4

    Manual Exception Handling

    Inefficiencies and delays due to unmanaged & ungoverned manual processes, sign-off procedures involving individuals in different departments and possibly different countries. If something goes wrong, weak processes cause unnecessary queries and chasing in AP and beyond to halt and correct the process.

  • 5

    Manual Invoice or Line Item Matching

    Inefficiencies matching invoices & line items with purchase orders, delivery notes, contracts and accounting system records.

  • 6

    Risk of Fraud

    The cost & risks associated with internal or external AP fraud as well as duplicates that are not picked up through the process. Ungoverned and manual processes are particularly vulnerable to this and accurately targeted because of this. Over two thirds of AP teams have received fraudulent invoices. During Covid-19, this has increased further.

  • 7

    Missed Early Payment Discounts

    Missed early payment discounts or terms as well as additional extra costs associated with late payment fees or rapid payments organised to correct errors and issues.

  • 8

    Limited AP Status & Performance Visibility

    Lack of visibility and control across the AP process, outgoing spend and cash flow

  • 9

    Queries and Escalations

    Unreliable and manual processes create internal or supplier queries and complaints compounding inefficiencies and issues.

  • 10

    Multiple Entry Points Cause More Problems

    Risk of information or document loss or even damage as documents are received at multiple input points and aren’t routed and classified correctly. Costs associated with manual document routing, shipping, couriers, storage, archiving and auditing.

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