Most businesses, no matter the size will have an accounts payable department that is in charge of procurement and invoice processing. Sadly, even if there is an accounts payable system in place, many businesses still make common mistakes that can drag the entire business down. If these mistakes aren’t identified and remedied immediately, this can cause a lot of future problems.
These are the most common accounts payable mistakes to look for and avoid:
Mistake #1: Frequent Overpaying And Duplicate Payments
Due to the lack of proper communication within the AP department, overpaying and duplicate payments may happen more often than not. Employees who are working with a manual AP system have a lot of trouble gaining access to updated payment and invoice information and there is a tendency to overpay.
An automated payment system will not make the same mistakes as each payment is scheduled on time and the system scans for inconsistencies and alters the people in charge.
Mistake #2: Paying When You Can Philosophy
There is nothing more frustrating for a vendor or a supplier than dealing with a client who demands services and goods that they cannot pay for. If your business is one of these who continues to add to their inventory and only pays their suppliers when you have money, there is a big chance that you will earn a bad reputation.
Without their goods and services, your business cannot function. Make sure you pay all of your suppliers on time and in full. An automated AP system can help you keep track of all the necessary payments with ease.
Mistake #3: Not Detecting Discrepancies
Discrepancies in the AP department can range from the typical duplicate payment, fake invoices, and even error in manual encoding. All of these discrepancies can harm a company’s finances in a major way. If the AP staff isn’t attentive enough to spot these discrepancies right away, a lot of money can be lost in the process.
This is where the use of an updated and automated accounts payable system will matter the most. Your company can save a significant amount of money by investing in an automated AP system because it can detect discrepancies before they become an expensive problem.
Mistake #4: Open Access To Everyone
Small business, in particular, tends to trust their employees too much. They allow everyone open access to important financial documents that only the AP staff should know about. This is very dangerous and costly because this can result in theft and fraud. As much as possible, limit access to documents and invoices to the staff of the AP department.
However, an automated AP system will require a password and the access of every invoice and document can easily be traced through the network. This will help keep sensitive information safe and away from prying eyes.
Resolve These Mistakes Soon
If you have noticed that your business is making any of the mistakes mentioned above, don’t wait until it is too late to act. Revamp the current AP system to secure all of your finances and prevent the downfall of the company.
Avoid the biggest mistakes in accounts payable with a good accounts payable system that you can rely on. Contact Nexus Systems today and let’s discuss how we can be of service.