![]() ![]() What is the AP invoice approval process?ĪP invoice approval process refers to the steps followed by the AP team to get a supplier invoice approved and paid. With AP invoice process automation, you will not reduce the time spent processing invoices by at least 30% and free up the team’s time to work on other value-added activities. This article will cover six steps you can take to automate the AP invoice approval process. If you are struggling with these challenges, don’t worry. Once in a while is fine, but no one looks forward to working weekends every month to close books on time. That leads to burnout and lower morale in the entire team. Your AP team members might have to work weekends to close books on time. The lack of AP automation software hurts the AP team’s productivity. If it is a critical vendor, it could have a significant impact on your bottom line because you cannot service your customers. The other challenge with late payments is that the vendor might stop delivering the product or service. Let’s take a simple case – let’s say you have $500K in monthly payments, and 20% of vendors charge you late payment fees.Īt 2% that is $2,000 per month ($500,000 * 20% = $100,000 * 2% = $2,000) They are buried under other charges or finance charges. If you think you never pay any late fees, check your invoices closely! The result is that invoices are approved late, and hence you pay invoices late.įor some vendors, it might be ok to pay them late, and they won’t charge you any late payment fee.īut most of the large vendors would charge anywhere between 1-2% late payment fees. The manual business process takes time, and getting invoices approved from stakeholders is a frustrating back and forth of emails. Unauthorized payments are the number one issue for cash flow. Invariably, one of these days, you will pay an invoice that is not approved for payment because the product or service is not received.Īnd if that is a large invoice, it has a significant impact on the company’s cash flow. Since the process is manual, it is hard to ensure everyone follows it. If there is no purchase order, the team must rely on getting approvals from stakeholders, which is constant back and forth. It is very hard for the AP team to match the invoices with the purchase orders with manual invoice processing. Bonus: Invoice process Optimizer – Proven steps to reduce the invoice processing time by 50%.Ĭompanies that have a manual AP invoice approval process struggles with the following challenges:
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |