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November 29, 2022
ARTICLE – Businesses expect more from their accounts payable (AP) department these days. It’s not enough for AP departments to just pay the bills as if that’s all that AP ever did.
The typical AP department always has been responsible for:
- Onboarding and vetting suppliers
- Issuing purchase orders (POs) to suppliers
- Validating the receipt of goods and services
- Matching supplier invoices to POs or goods receipt documents
- Routing any unmatched invoices or those requiring review for approval
- Taking any credits from suppliers
- Paying suppliers in their preferred method (e.g., ACH, card, wire)
- Reconciling bank statements for each account
- Reconciling bank debits with supplier payments
- Managing communications with suppliers and any changes to supplier information
Managing all these tasks requires:
- Tools for collecting and validating supplier information
- Software to manage the buyer’s general ledger
- Staff to administer the software and transactions
- The ability to initiate payments acceptable to suppliers
- A way to reconcile bank statements and supplier payments
Here are five signs that it’s time to automate your AP:
Sign #1 – Payment Fraud Attacks
Most AP departments have established policies and procedures for processing invoices and paying suppliers. But manual processes make it hard to enforce these procedures or track whether staff adheres to them. ePayables solutions built natively in the NetSuite ERP improve security by automatically enforcing separation of duties, ensuring adherence to approval processes, and logging all actions taken on a payment.
Sign #2 – Weak Supplier Validation
Doing business with bad actors can result in reputational damage, fraud losses, and costly government penalties. The best ePayables solutions include an online portal that makes it easy to collect all the information required by law to determine whether a company can do business with a supplier. Built-in tools and automated business partner searches validate the information suppliers provide, and optional paid services verify supplier credentials, ensuring the existence of a supplier through contact. Manually validating supplier information creates gaps that can allow red flags to go unheeded.
Sign #3 – Supplier Onboarding Takes Too Long
Manually collecting the information required to set up a new supplier has never been easy. But it’s harder now that staff are working remotely. Adapting manual, paper-based supplier onboarding processes to a remote work environment is complicated. ePayables solutions streamline the process of setting up new suppliers. User roles are clearly defined. Approval processes are established. Controls and authority are established. And complete audit trails show all actions taken to vet and set up a supplier.
Sign #4 – Difficulty Paying Suppliers in their Preferred Method
There are lots of ways to pay suppliers these days. It can be a burden logging into multiple bank portals or maintaining standalone systems to manage all the ways suppliers prefer to be paid. And a valued supplier may head to the door if they can’t get paid in their preferred method. The best ePayables solutions provide a single platform native in NetSuite for managing any payment method, including Automated Clearing House (ACH), international ACH, virtual card, and wire.
Sign #5 – Staffing Issues
Manual, paper-based processes require AP departments to add more staff as their volumes grow. By eliminating manual tasks such as double or triple keying payment information, chasing down check approvals, fixing errors and mistakes, and reconciling bank statements, an AP department can rapidly scale its operations to support business growth.
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