Accounts payable invoice processing is a demanding part of operating a business but an aspect no organization can overlook. Without a sophisticated accounts payable procedure, your credit rating may be impacted. Your business might be subject to penalties, supplier relationships may be jeopardized, and bills might not get paid on time.
To ensure smooth operations of such processes, read this post to discover if you are inadvertently making any mistakes with accounts payable invoice processing.
1. Not Using E-Invoicing
E-invoicing, or electronic invoicing, can do away with paper invoices and save your business time and money. With e-invoicing, you can receive, manage, and pay invoices all in one place electronically. This means no more postage costs for snail mail, no more scanning or faxing of invoices, and no more manual entry of invoice data.
2. Not Automating Accounts Payable Processing
There’s no excuse for not automating your accounts payable processes with the advanced technologies available today. Automation can help you manage and keep track of vendor information, automate bill payments, and reconcile accounts payable. This will only be possible once you understand why is reconciliation important
3. Not Doing Regular Accounts Payable Audits
Accounts payable audits should be conducted regularly to ensure that all invoices are processed correctly and on time. This also allows you to catch duplicate payments, missing payments, or other errors.
4. Failing to Check for Duplicate Invoices
Duplicate invoices are a standard accounts payable mistake. This can happen when you have multiple people entering invoices into your system or when you process invoices manually. It’s essential to have systems and controls to prevent duplicate payments.
5. Not Reconciling Accounts Payable Regularly
Monthly accounts payable reconciliation will ensure that all payments are accounted for and that there are no discrepancies in what was paid and owed.
6. Not Tracking Vendor Discounts
If you are not taking advantage of vendor discounts, you’re essentially throwing money away. To avoid this, keep track of all vendor discounts and take advantage of them when possible.
7. Not Managing Credit Card Expenses
If your business uses credit cards to pay for expenses, be sure to keep track of all credit card statements and reconcile them with your accounts payable records. This will help ensure that all expenses are accounted for and that you’re not being charged interest on outstanding balances.
8. Not Staying Up-to-Date on Accounts Payable Changes
Laws and regulations related to accounts payable are constantly changing. Be sure to stay up-to-date on any changes that could impact your business, such as new requirements for documentation or reporting.
9. Not Prioritizing Vendor Payments
Vendor payments should be prioritized based on the terms of the contract. For example, if you have a discount for early payment, make sure to make the most of it. Otherwise, you could end up paying more than you need to.
10. Not Reviewing Accounts Payable Procedures Regularly
Regular reviews of the accounts payable procedures ensure they are still effective and efficient. This is especially important if you have made any changes to your system or process.
11. Not Addressing Accounts Payable Issues Promptly
If there are any issues with your accounts payable process, be sure to address them as soon as possible. Ignoring problems will only make them worse and could eventually lead to financial losses for your business.
Final Thoughts
Mistakes in accounts payable can be costly for businesses. By avoiding these common mistakes, you can help ensure that your accounts payable processes are running smoothly.
If you’re not already doing so, consider automating your accounts payable to save time and money. And be sure to conduct regular audits and reconciliations to catch any errors.