Overcome these 7 AP Processing Pain Points with Automation

Manual accounting practices are notorious for creating pain points in an organization’s AP process. This can lead to strained vendor relationships, more errors, substantial late payment fees, and a greater risk of a fraudulent attack.

Doing more with less is the new norm for finance departments. AP practitioners seldomly have any extra time or resources needed to address small challenges before they become permanent pain points, which are often the direct result of manual, paper-based processing. Ardent Partners reported in 2021 that some of the top challenges holding AP back was invoice and payment approvals taking too long (60%), a high percentage of exceptions (48%), a lack of respect and status (33%), too much paper (31%), and staff spending too much time responding to supplier inquires (22%)¹.

If you’re among the many finance departments still using manual processing, you may be all too familiar with the challenges above. Implementing Paymerang’s best-in-class Invoice and Payment Automation technology can prevent these challenges before they turn into these seven common pain points:

1. Manual, error-prone data entry with majority of invoices received in paper format  

Manual data entry is easily one of the most time-consuming tasks of an AP professional – and one of the most tedious. Manual data entry also opens the door to error, as there is no way to guarantee mistakes won’t be made, which could end up costing an organization thousands. As of 2021, it costs an estimated $10.89 to process a single invoice, up 8% from the year before¹.

How does AP Automation solve this pain point?

Less errors and reduced paper through intelligent data capture and automated G/L posting

Paymerang’s Invoice Automation software creates an 80% reduction in errors with coding and invoice exceptions.

2. Duplicate or lost/missing invoices and lack of visibility into outstanding liabilities

Missing invoices and a lack of visibility can result in higher costs, endless payment delays, and late fees. Without visibility into cash flow, businesses run the risk of failure.  

How does AP Automation solve this pain point?

Enhanced visibility with electronic document workflows & audit trail

Paymerang’s Invoice and Payment Automation technology provide on-demand reporting capabilities to users, giving them more transparency through self-service reporting. This includes a payment history report, archived documents, and a payment status report.

3. Manual payment workflow that are time-consuming and human-capital intensive

 A staggering 84% of an AP specialist’s time is spent on manual tasks such as keying invoice data, chasing down approvals, fixing errors, and responding to calls and emails about the state of payments². As a result, finance teams have no time left in their schedule to focus on anything else.

How does AP Automation solve this pain point?

Increased efficiency with end-to-end automation that allows finance teams to re-allocate people to higher-level activities like data analytics and more

Why is this important? Implementing some form of automation makes recruiting and retaining top AP talent easier. Employees are more fulfilled and less likely to suffer burnout than workers in an all-manual department. Additionally, with more time in their busy schedule, staff will have time to focus on strategic initiatives, like collaborating with stakeholders and lowering production costs. Last but certainly not least, Paymerang’s Finance Automation tools empower staff to advance their careers.

4. High Volume of Check Payments

Using a paper check is both costly and inefficient for AP departments. Issuing one paper check can cost between $1 to $26, with an average of about $6 per check³. Paper checks are also highly susceptible to fraud. In 2021, 66% of companies paying by check experienced real or attempted fraud, compared to only 3% when paying with single-use virtual cards⁴. Fraudulent attacks can negatively impact your organization’s bottom line and potentially cause irreparable damage to businesses.

How does AP Automation solve this pain point? Multiple payment modalities with intelligent routing engine

Making business payments with paper checks is onerous and expensive and can often lead to payment delays. Paying your vendors on time with their preferred payment method strengthens supplier relationships.

5. Large number of discrepancies and disputes

Without visibility and reporting capabilities, it’s impossible to determine whether an invoice has been approved or if a payment has already been made for the correct amount. Even worse, this can lead to lots of back-and-forth discussion with an unhappy vendor who didn’t get paid on time. According to PYMNTS, delayed payments cause strained relationships with vendors while also causing businesses to lose out on perks⁵. For example, 59% of suppliers that had been paid late reduced or halted discounts, and 62% withheld goods or services that were ordered until invoices were paid.

How does AP Automation solve this pain point?  Frictionless and effective payments that improve supplier relationships and eliminate discrepancies and disputes

Partnering with a best-in-class automation provider like Paymerang gives users and vendors access to white-glove customer service and software that instantly becomes an extension of your AP team. With access to on-demand reporting capabilities and payment follow-up and reconciliation out of their hands, staff has less stress and more time to focus their attention elsewhere.  

6. Inability to approve payments in time to receive early payment discounts

Slow approval processes and manual procedures make it challenging to take advantage of early payment discounts. According to Ardent, the average time it takes to process one paper invoice manually is ten days¹. This is time-consuming and leads to payment delays, which can harm your good standing with vendors.

How does AP Automation solve this pain point? Quicker approval and increased discounts from early payments

AP Automation speeds up the approval process and enables your team to take advantage of early pay discounts, decreasing costs and positively impacting your organization’s bottom line.  

7. High level of security, compliance, and fraud risks related to payment activity

With so much time and energy spent on manual AP processes, fraud risk mitigation often falls by the wayside. Unfortunately, fraud schemes are getting increasingly more sophisticated, and finance teams must focus on mitigating their fraud risks.

How does AP Automation solve this pain point? Increased security and lower fraud risk

AP Automation safeguards payments and helps keep bank accounts safe from fraud. Paymerang’s internal security teams prevent hundreds of fraud attacks, saving millions of dollars for each year. Partnering with an automation provider that uses Positive Pay, an automated cash-management service used to deter check fraud, lowers your risk of a fraudulent attack. Banks use Positive Pay to match the checks a company issues with those it presents for payment to ensure there is no suspicious activity. Paymerang also provides educational content that warns users about the different types of fraud, such as vendor impersonation and business email compromise.

These seven pain points make it difficult for AP departments to increase growth and value. With these pain points eliminated, organizations can transform their business from top to bottom line, better reach their goals, and serve their mission with manual headaches eliminated.

To learn more about Paymerang, click here.

Sources

¹Ardent Partners’ Accounts Payable Metrics that Matter in 2021

²The Institute of Finance Management

³Check Issuing: The Cost of Issuing Checks (A Guide for Businesses)

⁴The Association for Finance Professionals

⁵PYMNTS