How to Get to The Root Cause of Accounts Payables Pain Points… And Overcome Them

Despite recent technological advances and the abundance of best practices shared in the financial community, many Accounts Payable (AP) organizations still face the familiar payables pain points they've endured for years.

At the same time, companies are embracing the changes in digital technology and achieving huge efficiency savings, allowing them to take on more value-adding work.

We surveyed over 150 shared services professionals. This report focuses on the responses of the shared services professionals that are looking to improve their accounts payable process.

Download the PDF below for more insight into the stats and conclusions.

Here are just some of our findings

• The major pain point in payables is lack of visibility into payment status. Poor visibility into payment status makes it difficult for suppliers to forecast their cash flow, and requires AP staff to field many supplier calls about payment status. While the technology exists to provide suppliers with real-time invoice and payment status, this requires that they move off paper and support an electronic process.
• Over a quarter struggle with a manual, check-based process. This is felt mostly by North American companies.
• Risk of fraud ranks lower in the list at 14%, but further survey results show that 43% of respondents have experienced at least one instance of fraud in the last year. Poor payment practices can increase your risk of fraud. Holding suppliers' bank account information in an internal system without strong security and proper controls can raise risk. While only 14% cited fraud as a pain point, 43% reported at least one incidence of fraud in the past year. Attention to fraud risk is an important component of a payables strategy.

Our survey shows that the top three pain points negatively impacting payables operations are: lack of visibility, manual, check-based processes and risk of fraud. Here are some recommendations on how to move forward.

1. Reduce the inflow of paper to improve visibility and unburden Accounts Payable.

Paper invoices complicate invoice processing, keep suppliers in the dark about invoice status and payment timing, and limit opportunities to take early payment discounts. With paper, AP spends too much time validating invoices and responding to supplier phone calls and emails. Electronic invoicing can relieve this burden.

2. Prioritize electronic payments, and ensure you can include adequate remittance detail.

For many regions of the world, paper checks are relics of the past, but in North America, many organizations still struggle with paper. For those of you embracing electronic payments, make sure you can include detailed remittance information. Otherwise, you won't have the visibility your suppliers and your AP team need to fully leverage the capabilities of electronic payments.

3. Get proactive about risk in your supply chain.

It takes only one high profile incidence of fraud to damage your reputation. Both manual payment processes and maintaining supplier bank account information on internal systems can raise your fraud risk. Don’t wait until it happens to you. Examine the risk of fraud in your supply chain and the opportunities to keep your supplier information secure and up-to-date, perhaps engaging a third party that has expertise in this area.

For more insight, download the full PDF here