One of the biggest accounting challenges faced by businesses all around the world is lack of consistent cash flow and lack of efficient Accounts Payable Process one of the major causes. However, the problems caused by inconsistent AP doesn’t end there. Problems in invoice processing and the AP problems that follow can impact the production quality, firm reputation, market perception and even financial terms businesses receive during loans.
Nip the AP Problems in The Bud:
Like every other accounting problem, AP issues start small and stealthily cause problems before they strike hard. If you are a small and medium business then you need to be aware of these common AP issues to fix them before they go out of hand and impact your business.
With this blog here we aim to improve your awareness about the common AP pain points that must be carefully dealt to ensure consistent cash flow and smooth business operations. However, any business can be plagued by these pain points. If you are one of them then the next part of the blog will let you know how Outsourced Bookkeeping can help you overcome these pain points and make way for an effective AP process. Read on:
High invoice processing costs:Seemingly innocuous Accounts Payable does cost a business especially if the AP is manual. Direct costs, labour costs, indirect costs (storage), compliance error costs, late charges and penalties can raise the invoice processing costs which can impact the business revenue. High processing costs inevitability indicate an ineffective AP process and must be fixed as soon as possible to reduce the cash leakage.
Lack of transparency and visibility:Most AP processes, especially the manual ones suffer from a lack of adequate visibility and transparency which poses a slew of problems. Lack of transparency delay the approvals making it difficult to identify the processing problems and also clouds the status of invoices. Especially lack of right information about invoice status makes it even more difficult to optimize the invoice process and strains vendor relationships.
AP invoice processing delays:Unexplained yet consistent delay in invoice processing delay most common AP pain point that 50% of the businesses face. Slow manual processing methods, payment processing problems, and broken AP processes with lack of visibility are common reasons for delays in invoice processing.
Errors and incorrect invoices: In addition to being time-consuming and cost incurring, manual invoicing is the common cause of invoice errors. What makes errors a serious concern is the time taken to correct them, a delay that happens which raises the cost of invoices while straining vendor/supplier relations.
Tax Problems due to invoice issues: Given the countries of sender and receipt have to taken into account things can go awry for a business when the invoice doesn’t meet the VAT requirements. Incorrect invoices lead to incorrect taxes and payment dues which again results in extra expenditure.
Risk of AP fraud: Given it is the centre for all the payment processing, AP has always been the most vulnerable branch for accounting when it comes to fraud. Too many touchpoints and AP stages combined with a lack of transparency on approvals make it even more vulnerable to financial discrepancies. Almost 30% of the businesses suffer from payment fraud at some point in time, according to reports.
How Outsourced Bookkeeping can help you overcome common AP pain points?
At Outsourced Bookkeeping, we leverage automate AP systems in conjunction with highly trained manpower to keep the costs low while delivering great accuracy. Accelerating the invoice processing at each of the AP stages reduces the time and money spent on processing each invoice. Improved accuracy eliminates the possibility of compliance errors or penalties keeping the invoice cost low.
Our expert CPAs with help of AP automaton build a streamlined AP process that reduces touchpoints, improves visibility to accelerate the approvals and reduce the time taken for invoice processing. With cutting edge security protocols we simplify the entire AP process while providing a secure and tight-knit AP process that eliminates the risk of fraud.
In addition to the Accounts Payable process, we also offer complete accounting services in addition to tax filing and consultation services making us a one-stop solution for all accounting problems. In case you have been encountering any of the above AP problems our Account Payable experts at Outsourced Bookkeeping will be happy to help you solve them. For Outsourced Accounts Payable Services, you can contact us here: https://outsourcedbookeeping.com/
