Challenges faced by Accounts Payable Specialists
The Accounts Payable (AP) specialists within an organization are responsible for the timely payment of outstanding liabilities to the organization’s suppliers of all kinds. Suppliers deliver their supplies, issue their invoices, and collect payment within a defined period. As with other business professionals, AP specialists face their own challenges. Let’s see some of them.
Paper billing: This challenge is not just about the use of paper but the associated manual processes, additional expenses, and wastage that come with it. A recent Business week article (titled The Check Killers) highlights how US businesses are 20 to 30 years behind other countries in moving away from paper and how this leads to unnecessary spend. Apart from the need for collection and storage, paper-based systems also create delays and bottlenecks.
Data duplication: Another major time killer for AP specialists is data duplication. It is impractical to expect all our suppliers to follow the same processes and systems as us. They have their own operating procedures and systems to manage their business. It is not uncommon to see the purchase order, the packing slip, and the invoice in three different formats. In such cases, it is incumbent upon the AP specialists to convert them into their own formats, a data duplication task that adds to their woes. This also brings up the issue of errors due to manual entry.
Processing times: Some suppliers offer discounts for payments made early and levy penalties on late payments. AP specialists would like to take advantage of these discounts and avoid penalties but they have a major obstacle in their way – processing time. Part of the blame goes to the paper-based systems we spoke about earlier and part of the blame goes to inefficient workflow routing and delays in obtaining approvals and matching invoices.
These challenges could be effectively met by using Accounts Payable automation software. We’ll talk about how it helps in a different post.