Common Hurdles for AP Managers
Managing accounts payable isn’t always an easy process for companies that still do it manually, and many of the issues that arise – whether it’s every single month or infrequently – are actually quite common within AP circles. To that end, it may be possible for AP managers or controllers to do more to identify and deal with these stumbling blocks, and automating the AP process is often a good place to start.
But first, it’s important to have an understanding of some of the more common obstacles AP departments face, and then work to identify the best methods for addressing them. Here are just a few:
Accuracy of data entry
When various aspects of the AP process aren’t automated, data that’s entered manually into various software platforms is more likely to contain typos or otherwise be inaccurate. That, in turn, can cause a lot of problems on an ongoing basis for any company.
The fact that the AP process often takes so much time – which can be better spent on other issues – certainly relates back to data accuracy. After all, those mistakes have to be first discovered, often through painstaking processes, then corrected.
However, inefficiency problems also go beyond data accuracy. When companies rely on manual data entry, that’s just a time-consuming process even if everything goes right, and those are man-hours that would likely be better devoted to other aspects of the business.
Making Cross-Border Payments
Today, an ever-growing number of companies are doing international business, and they sometimes struggle with how to handle the cross-border payments. Even as more companies – regardless of size – are doing this kind of business, these payments are difficult to execute, especially if they’re dealing with manual AP processes.
Due to how many financial institutions need to be involved in a cross-border transaction, the more companies can do to simplify the process on their end, the better off they and their business partners will be. This means being able send a cross-border payment using the same process as you would for an ACH or check.
Your Audit and SOX compliance
The Sarbanes-Oxley Act is designed to protect shareholders and others against accounting errors and corporate fraud, as well as requiring companies to be more accurate with their financial disclosures. But with manual processes for accounts payable, it’s not always easy for companies to comply with these rules.
Simply put, there are a lot of ins and outs that can affect SOX compliance – as well as other types of audits – and when process aren’t automated, it’s far easier for one aspect of it to be overlooked. That can open companies up to significant liabilities in certain situations.
The lifeblood of any company is its cash flow, and therefore the ability to predict that cash flow from one month to the next is often paramount to both long- and short-term planning. However, when dealing with manual AP data entry, it becomes a lot more difficult – not to mention time-consuming – to accurately make those predictions. That can consequently be a hindrance not only to the AP department, but the entire business.
With all these issues in mind, there’s one overarching theme: The manual AP process is slow, burdensome, and potentially filled with pitfalls for any company. As a result, it’s vital for companies that haven’t yet done so to examine the options MineralTree can provide to help them shift to a paperless, automated accounts payable solution. MineralTree’s offerings can significantly help companies in their quest to overcome these common hurdles and gain crucial insights into their finances on an ongoing basis.
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