Accounting systems are essential to optimize accounting and financial operations. It remains your core system of record and centralized source of information across all functions within the organization.
Your accounting system to manage your accounts payable alone might be working for you, but what are you potentially giving up by not integrating with a solution that is solely focused on automating this entire process? In today’s world of ever changing business conditions and market disruptions, companies are recognizing that there are benefits to extending the functionality of their accounting system by integrating other solutions that focus on specific areas such as payroll, T&E, tax, and accounts payable.
In this blog, we look at four key reasons why you should consider integrating an accounts payable automation solution with your accounting system:
- It is a Paper-Centric Process – Managing accounts payable with your accounting system alone is often a manual process consumed by paper. Invoices are mailed, faxed, e-mailed, forwarded, and handed off to the accounts payable team in any number of ways. There are many reasons why you should rid yourself of these piles of paper, but here are a few that are serious concerns:
- You are at greater risk of misplacing invoices, which can put you at risk for late payment penalties and vendor dissatisfaction.
- Your audit may not be as smooth as it can be. When you are using a paper-based process, it becomes even more difficult to reconcile and trace approval workflows and invoice-to-payment reporting. When the auditors show up, you will be racing to pull files from your cabinet, shifting through files on your desk, and trying to find that one missing invoice.
- You are at greater risk of fraud. Without a traceable approval process that does not allow the invoice to be processed for payment without designated authorizers indicating approval, you are opening yourself up for fraud to occur.
- There is Limited Access Based on User Role – Accounting systems will typically assign a user role to each user that limits their access to certain operations within the system. When users can see certain pieces of the process and not others, they consume time identifying who has access and how they can accomplish the task at hand. On top of that, your approvers may not have access at all, which brings us back to your ability to accurately capture and track the entire workflow and progression of the invoice and payment.
- Limited Visibility into Your GL Specifically Related to Payables – When you are making payments in various methods, you introduce the need to go into different accounts or areas of record keeping getting to your true GL balance. You may have to look at credit card statements, bank statements, and payment records that have not cleared in these accounts yet and manually reconcile everything in a spreadsheet. Therefore, it is not real-time. You have not considered your credit card payment that has not been processed, the check that has not cleared, the ACH scheduled for next week, etc. This makes it very difficult to make decisions and accurately report on cash flow.
- There is No Mandate for One Consistent Workflow – Without accounts payable automation, you may have a vision for a consistent workflow but not the tools in place to ensure that it is followed every time. Your invoices are being submitted to you in various, inconsistent manners, and your approval process may or may not happen or you do not know who needs to approve what or even certain amounts. This limits your ability to have a smooth audit. And, you most likely do not have rules defined by vendor to ensure that you are paying them in the method that they prefer or have a consolidated view into past invoices and payment history.
To achieve accounts payable nirvana, you need more than your accounting system. Some quick benefits of adding an accounts payable automation solution include:
- Eliminating the payment of duplicate invoices, errors caused by manual data input, and suboptimal payment methods
- Capturing the right discounts
- Mitigating fraud risk exposures
- Clear and detailed audit trails that improve internal controls
- Improving supplier relationships
- Transparency and visibility that create a culture of continuous improvement
- Increasing employee focus on value-added activities
Your accounting system alone is not going to provide you with automatic invoice capture, advanced and automated invoice approval routing, mobile device access, consolidation and access to any payment method, and management dashboards for real-time GL data. Accounts payable done right improves productivity across the enterprise, facilitates more valuable supplier relationships, and supports company growth and business agility.
Your company deserves better, a best-in-class accounts payable automation solution that works in tandem with your accounting system to maximize the strategic value of accounts payable. Contact us today to learn more about how we integrate with your accounting system.