Accounts Payable is a simple process – said no one ever. It can be intensive and taxing when not managed well, especially for small and medium businesses. Even businesses with well-established AP process make mistakes which overtime can corrode their accounting process. And this why an AP specialist must watch-out for mistakes that can creep-in into the process.
In this blog here, we make you aware of overlooked Accounts Payable mistakes that every AP personnel aiming for an efficient and accurate process must watch-out for. So, read on:
Not Closing the Purchase Orders:
A simple error in Accounts payable can turn out to be a costly mistake and double-payments are the most common ones that happen. While duplicate invoices from clients are partly responsible for this payment problem, majority of double-payments happen when purchase orders are not properly closed by the accounting personnel during processing.
Ensure proper closure of purchase orders and witness a significant fall in double payments!
Batch Invoicing:
Consolidating all invoices into the one-time slot and getting them done does have its upsides. It improves consistency, gives stable a work routine, and also can save time. But entering them into the system individually is necessary to ensure a robust audit trail – which is a real saver during any sort of audit.
Also, batch invoicing may not be suitable for all clients – especially the ones who need immediate payment or cannot wait until D-day. So it is better if you can provide an exception or mention the same to the clients beforehand.
Relying on Paper Process (At any stage):
Relying on paper at any stage of the process is an open invitation for problems in the Accounts Payable process. For example, any changes or alteration in final payment may not timely reach the right person and reflect when you rely on the paper invoice – this can happen literally at every stage of the process. Avoiding reliance on paper not only reduces the risk but also improves the accuracy makes it easy to scale. So we recommend automation – completely or as a part of the entire AP process.
Vendor Management:
In most cases, Accounts Payable departments are too occupied with the piling work that they fail to ensure proper communication with the vendors regarding the invoice and payment statuses. Maintaining cordial relations with vendors and suppliers is paramount, especially for a growing business. And first step to ensure it is prompt communication and vendor management.
More often than not, in an unoptimized AP process, the AP staff do not have proper information which can lead to miscommunication or worse, no-communication. This can reflect poorly on the business and strain the relationship with vendors and suppliers. So we recommend you first streamline your AP process to bring all the AP personnel on the same page and enforce standard communication guidelines for better vendor communication and management.
Multi-tasking – Donning Many Hats:
Agreed multitasking is common for small and medium businesses, it is a proven that accounting works best with dedicated experts, especially with intensive processes like Accounts Payable when transactions surge.
When a single resource is burdened with too much responsibility it can delay the work, stretch the invoice cycle times and also increases the risk of error which can prove costly when it comes to Accounts Payable. Instead, when the works are smartly delegated at the right times based on expertise, the entire process can be streamlined for better performance and efficiency. Also, this can help you bring more transparency, visibility into the AP process while keeping financial discrepancies in check.
Outsourced Accounts Payable Services by Outsourced Bookkeeping:
However, few businesses may not behave the privilege of accounts payable personnel at their disposal which can hold them back. If you are a small and medium business looking to plug your Accounts Payable gaps but cannot hire dedicated Accounts Payable experts relying on expert back-office accounting firm like Outsourced Bookkeeping is the right step.
With a team of expert accountants, bookkeeping experts, Accounts Payable specialists, Outsourced Bookkeeping has been a trusted partner for CPA firms in the US, for a decade now. From bookkeeping, tax preparation, QuickBooks services, to dedicated Accounts Payable Services, we provide expert assistance for all types of accounting functions at an affordable price point. This way you can focus on your core activities without having to spend your time and money on dedicated resources.
If you are looking for outsourced bookkeeping, accounting or accounts payable services, you can contact us here: https://outsourcedbookeeping.com