For too many businesses, the payment process is flawed—64 percent of B2B payments are still made with checks according to industry magazine PYMNTS.com. In the B2B world, paper is still present in the beginning, middle, and end of the payment process.
From increased time it takes to process and pay a paper invoice using a paper check to the much higher risk of mistakes and fraud that come from the lack of controls, the traditional payment process is costly, time consuming, and dangerous for your business.
The PYMNTS.com article goes on to highlight that on average, B2B payments has an 18 percent error rate and the average invoice costs $17 and 10 days to process—with the entire B2B transaction lifecycle lasting 34 days in the US. Even as the speed of business has increased, the speed of payments has not.
While both buyer and supplier have been the target of blame for lack of payments innovation, suppliers still expect to be paid on time—and payment delays are much more costly for buyers. From lost rebates to fraud and duplicate payments to reputation damage or late payment penalties, manual and outdated processes hurt your company much more than your suppliers.
What’s Holding Back Your Payments?
While there are many things holding back the people in your accounts payable, finance, and purchasing departments from aligning the AP process, the following are often the most common offenders:
As mentioned above, if there’s one thing that’s seemingly omnipresent in the AP world, it’s paper. Whether you are receiving a paper invoice, manually typing in details, attempting to attach paper documentation throughout the approval process, or paying by check, paper creates risk. An Aberdeen Report found that paper continues to hold back business, with forty percent of respondents said the need for real-time availability of data is a key AP challenge, and 29 percent said difficulty locating/managing paper-based documents was a struggle.
When working to improve your AP process, reducing your paper use should be a top priority. Not only will this reduce the inaccuracies that exist in the form of exceptions, document matching technology will provide approvers and finance professionals greater visibility into the process.
2. Disparate Workflows
Paired with the paper-based processes that are prevalent in accounts payable, another key challenge is routing an invoice to the right people. When workflows are poorly set up, visibility suffers, the time to approve an invoice increases, the risk for fraud skyrockets, and auditability becomes a concern.
In the path to AP innovation, proper workflows are vital. From the day an invoice enters your office, it needs to be routed to the right people for approval, payment, and recognition in the accounting platform.
Any time you have to manually enter details into a system, you run the risk for an inaccuracy. A finger slip or a missed decimal could lead to a mismatch, an exception, or an over/underpayment to a vendor—turning a seemingly simple payment process into a series of calls to make a fix. According to Aberdeen, 8 out of 10 (or 82%) of all invoices will have at least one exception, often slowing payments to a crawl.
However, by integrating AP with ERP, you can develop stronger workflows, reduce the amount of paper your company has to manage, and ultimately speed up your invoice payment process.
The Cure? Accounts Payable Automation and Integration
Accounts payable innovation and integration is an ongoing process that businesses need to look at if they hope to improve supplier relationships, capture more discounts, and minimize gaps in visibility.
Often, businesses have found that the best way to improve the procure-to-pay process is to find either a built-in or tightly-integrated solution that brings their AP and ERP closer. Accounts payable software automates receiving the invoices from your suppliers and sub-contractors, and Acumatica has designed an AP solution built into their ERP product that can deliver faster, more accurate payments to suppliers.
Going Even Further: Crestwood AP Inbox Assist for Acumatica
While Acumatica has designed and delivered an integrated AP solution, the Crestwood team saw an area for improvement. As one of the leaders—not only in Acumatica implementation but in application development as well—we found a way to speed up the AP process even further: AP Inbox Assist.
AP Inbox Assist gives you the power to streamline invoice processing, create AP bills on the fly, and make workflows even smarter. With AP Inbox Assist, you can speed up accounts payable even further, reducing AP time by 50% while improving speed and accuracy. Learn more in How to Speed Up A/P Bill Processing in Acumatica.
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