4 Common Accounts Payable Pitfalls and How to Solve Them

Achieving optimal accounts payable outcomes hinges on streamlined processes, timely payments, and strong vendor relationships. The best-functioning operations utilize automation and data analytics to increase efficiency, reduce errors, and enhance financial transparency. Once these are in place, you can foster a culture of compliance and accountability that leads to more accurate financial reporting and improved cash flow management.

Here are 4 common issues that we see and our approach on how to solve them.

1. Invoice Processing Delays

Pitfall: Ineffective use of resources due to manual processing of supplier invoices and 3-way match issues. This leads to errors, delays and missed payments.
Solution: Implement digital automation with optical character recognition (OCR) to instantly extract invoice data, reduce processing times and errors.

2. Data Inaccuracies

Pitfall: Typos and misinterpretations are caused by manual data entry. These can compromise financial integrity, accuracy of reports and decisions.
Solution: Adopt intelligent automation for data extraction and verification, ensuring invoice data matches purchase orders and delivery receipts.

3. Vendor Management Challenges

Pitfall: Missed opportunities for early payment discounts and/or financial losses due to late payment penalties. This is caused due to the complexity and inconsistency of terms across vendors.
Solution: Use integrated dashboards and develop ‘pay schedules’ or ‘pay calendars’ that suggest cheque runs for those which yield the highest returns (by capturing early payment discounts and avoiding late payment penalties). This will also manage vendor data proactively by facilitating timely negotiations and contract renewals.

4. Invoice Exceptions Causing Processing Delays

Pitfall: Invoice exceptions can cause significant delays and confusion, as they require manual intervention. Invoices requiring added effort are often delayed due to other priorities.
Solution: Integrate automated software to detect and flag exceptions, ensuring they are routed to the appropriate team members for quick resolution. This keeps your AP process moving efficiently despite inevitable discrepancies.

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All in all, these are some key improvements you can make to improve workflow, increase efficiency and accuracy in your AP functions to capitalize on the ensuing benefits of automation. Our business consulting services team has the relevant experience in administrative operations to understand and solve your current challenges.

If your accounts payable processes are out of control, reach out to discuss how we define and/or implement solutions that will improve your AP/AR functions or other business processes that are essential in supporting your organization’s overall success.

4 Common Accounts Payable Pitfalls and How to Solve Them

1. Invoice Processing Delays

2. Data Inaccuracies

3. Vendor Management Challenges

4. Invoice Exceptions Causing Processing Delays

Need Help?

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