Accounts Payable process of capturing invoices and making sure of timely and legitimate payments is easier said than done in real-time. Given that the AP process has many interim stages, from capturing the invoices to processing the payments – each stage increase the chance of error when the process is manual and unoptimized. An error-prone Accounts Payable can slowly corrode your business before you even realize, making a revamp necessary, whether by automating your current Accounts Payable workflow or by outsourcing Accounts Payable to back-office accounting firms.
Back Office Accountants – Know the Signs:
If you are a small and medium business you must be wary of unhealthy Accounts Payable process before it can sink your ship. You must look-out for the signs that reflect the flaws in your Accounts Payable process.
Having worked with a variety of small and medium business across different business verticals, our Accounts Payable Specialists at Back Office Accountants can easily identify an unhealthy Accounts Payable process– it’s all about identifying simple signs.
In this blog here, we make you aware of these signs that reflect inherent AP problems which when not addressed can be a threat to our entire business. So, read on:
Complicated Accounts Payable Process:
There is one common sign we have noticed among all the efficient AP processes – Inconsistent and complicated AP process, which is more of a precursor for all the AP problems faced by a growing business.
For example, a small business’s AP system which is often managed by a single AP specialist with his unique approach can run into problems when business grows, AP demand surge and there is no consistent process to manage the increased demands.
The complicated and inconsistent AP process can delay the process, make tracking a nightmare and increase the risk of payment delays and financial fraud. If you are starting out, always make sure you follow a consistent, streamline and efficient process that can be easily scaled with the right help.
Losing Track of Invoices:
Invoices can arrive in a wide variety of formats and this can increase the risk of misplacing or losing them altogether when they are not properly captured, ordered and integrated into the AP system.
Misplaced invoices are the most common problems every AP department that resorts to manual processing had to endure. Making efforts to track or find them can be costly both time and money wise – this simple yet significant problem can be a telling sign of an efficient AP process.
Given it triggers the delay of payment, makes double payments possible or even sabotage the payment altogether, it is give away sign of an unhealthy Accounts Payable and has to be fixed as soon as possible. Automating can help, but if you resort to manual process in general, but would like to automate this particular step in the Accounts Payable process, there are back-office accounting firms available that can help you with invoice tracking and data capture.
Missed Payment Deadlines:
The most obvious give away of an inefficient Accounts Payable Process is missing the payment deadline due to one reason or the other. Failure to capture invoice data accurately or misplacing or losing track of invoice altogether, the problem with payment processing – whatever may be the reason or reasons, missing payment deadlines do have its repercussions in the form of late payments and vendor dissatisfaction and nothing is more efficient in doing so than missing the payment deadlines.
Financial Fraud & Security Problems:
Small and medium businesses that lack proper financial guidelines and protocols suffer the risk of double billing, false billing and other types of financial fraud or even security or data breaches in AP.
Being a payment processing gateway, AP is the ripe ground for financial fraud and data breach when the AP system is not optimized perfectly for both security and performance which needs dedicated AP expertise. By the time you face a financial fraud or discrepancy, you must have already felt the need to revamp your AP process which is the right step.
Adopt a Streamlined & Efficient & Accounts Payable Process with Back Office Accountants:
The first thing you can do it fortify your AP process is to replace the manual AP with automated Accounts Payable process. If you are a small and medium business for whom revamping the AP process with automation or hiring dedicated AP specialists is not practical at this point, you can simply outsource Accounts Payable to expert accounting firms like Back Office Accountants.
Equipped with advanced Accounts Payable tools and software, our Accounts Payable Specialists can chart the right Accounts Payable strategy for your business and execute it to perfection. This way you can reap all the benefits without having to spend more time & additional money, and lay a foundation for high –performance AP system with minimal effort. You can contact our Accounts Payable Specialists here: https://www.backofficeaccountants.com/