Even if you’ve automated your A/P operations, manual processes often get in the way. This can waste time, money and energy for companies.
A/P automation solutions provider Beanworks surveyed A/P pros on their biggest manual pain points that bogged down productivity. And the results may not surprise you.
Here are the top three issues with manual processes that hurt productivity in A/P, as well as some strategies to make everyone’s life easier.
1. Lost/missing invoices
How many times has this happened at your company: A/P receives an invoice in the mail and files it away, but when it’s time to cut the check, it’s somehow nowhere to be found?
Misplaced invoices have a huge impact on A/P operations.
To avoid late fees after the oversight’s been discovered, payments may be made too hastily, which could increase the likelihood of your company falling victim to fraud. And since over 75% of A/P pros surveyed have received a fraudulent invoice since the start of the pandemic, this is a big concern.
One way to keep invoices from disappearing is to have A/P scan all paper invoices and save them securely on a computer immediately before filing them away. That way, A/P can find them easily.
For electronic invoices, it may be best to automatically route them to a specific email address or inbox folder so they don’t get lost in the shuffle.
2. Data entry
When A/P has to key data manually into your accounting system, it slows down the payment process.
Even worse, it’s a significant contributor to A/P errors.
In fact, 88% of A/P pros surveyed said most payment errors happened because of manual processes.
And because of these mistakes, nearly two out of three worked longer hours to fix them.
They also contribute to stress. Almost 60% of those surveyed said the stress of their jobs in A/P keeps them awake at night, and 55% said they don’t have enough time in the day to complete all the tasks on their to-do lists.
Overworked and burned-out employees are more likely to make mistakes in general. So this becomes a never-ending cycle that eventually impacts your bottom line.
The best way to cut down on manual data entry is automation. Software that automatically enters data from scanned invoices into A/P systems for processing is one option.
If a pricey finance-specific solution isn’t in the budget, you may want to look at a more cost-effective document management system for scanning that the whole company can use.
3. Paper invoices & checks
As you know, paper invoices can’t always be avoided. An average of 40% of invoices A/P pros received arrived on paper over the past year.
In addition, 72% of A/P pros surveyed exclusively use paper checks to pay their vendors.
Paper-based payments are more prone to fraud. Seven out of 10 of those surveyed said they believed their current paper-based manual processes were more vulnerable to fraud than automated processes were.
Because of this, many companies have now added additional layers to the payment approval process that boost security. But bad news: They also increase inefficiency in A/P.
Example: More people have to sign off on payments before checks are cut.
Changes like these have caused 77% of respondents to work overtime so payments go out by their due dates. That can get expensive if any of your people are nonexempt.
Paper-based manual processes are also expensive and time-consuming, slowing down A/P and cutting into your profit margins.
To help, you and A/P will want to encourage vendors to accept e-payments via ACH, wire transfers or virtual cards. And you’ll want to work with A/P to get vendors to send you e-invoices whenever possible.