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Common Accounts Payable Processing Challenges

At a Glance

Main Takeaway

Every business must handle accounts payable processing tasks efficiently to maintain operations and stable cash flow. Paying vendors and other liabilities on time ensures beneficial partnerships and allows your company to make solid financial projections for the future.

However, many companies face issues when processing accounts payable, leading to long processing times, rejected payments, and a high rate of manual errors. This gap between efficient accounts payable processing and its challenges can harm your industry reputation and cause problems with your accounting.

Next Step

Discover the most common accounts payable processing challenges your business may face and how outsourced bookkeeping services can help you close the gap and improve operations.

Top Accounts Payable Processing Challenges for Private Businesses

Accounts payable (AP) processing challenges primarily arise from ill-defined or unsupported processes, human errors, or high workloads. The most common issues your company may face include the following:

Processing Time

If your company struggles with AP operations, you may face extended processing times regarding invoices from vendors or suppliers. Companies that use paper invoicing must send the document through multiple personnel to get it paid, increasing the likelihood of error.

Paper processing also results in lost invoices, which means longer processing times and vendor frustration. Poorly trained or unmotivated employees can cause extended wait times for vendors expecting timely payments, even if your business uses invoicing software.

Mismatched Items

With outdated or inefficient AP processing, your company may see issues with mismatched items. For instance, your purchase order amount may not align with an invoice or a receiving report.

When mismatches occur, it consumes employee time and effort in order to thoroughly investigate where the error occurred, determine how it impacts your accounting, and fix the problem. These incidents delay other processes and increase wait times for other AP deliverables.

Rejected Bills

Vendor mistakes on invoices can lead to rejected bills on your end, regardless of your in-house AP system. These transactions lead to decreased efficiency and bookkeeping challenges due to your staff having to wait for a response from the vendor and a corrected invoice. Once a new invoice is sent, your team must reprocess the bill, adding time and effort to the transaction.

Manual Errors

Manual errors are a significant pain point for companies dealing with AP processing issues. If your AP team uses manual bill payment operations or software that requires manual data entry, you may see human errors that result in losses for your company.

These losses may include excess payments that the vendor does not report or transposed numbers reflecting inaccurate payment amounts on your ledgers.

Many companies use cloud-based accounting software to address manual errors. While this solution can benefit some companies, these products require someone on the team to learn how they work and teach others. Understanding the program and training all AP staff can take several weeks and wreak havoc on your AP processing in the meantime.

Non-Approved Purchases

You may sometimes face challenges with untrained or unscrupulous employees who make non-approved purchases for your company. These transactions can be as benign as using the wrong vendor to pay for equipment or office supplies or as blatant as using company funds to pay for private dinners or travel without approval.

When your AP team performs their duties inaccurately, it can lead to problems with your accounting and cash flow. It could also interfere with your ability to file tax deductions, such as the IRS mileage rate deduction.

How Outsourced Bookkeeping Closes the Gap Between Inaccurate AP Processing and Cash Flow Success

Many companies turn to outsourced bookkeeping to close the gap in AP processing challenges. Outsourced bookkeeping involves working with an outside company specializing in professional bookkeeping and accounting services to handle your accounts payable and other AP tasks.

Modernize Your Bookkeeping Processes

Partnering with an outsourced bookkeeping company like Windes modernizes your AP operations, eliminating outdated manual processes. AP digitization improves internal bookkeeping operations and allows you to work with vendors that use online digital invoicing software.

Windes uses updated bookkeeping software such as QuickBooks, Bill.com, Sage Intacct, and XERO to keep your organization up-to-date and improve AP processing.

Minimize Processing Time

Outsourced bookkeeping minimizes processing time with automated, cloud-based programs. Windes can establish a customized bookkeeping plan that meets your company’s needs and reduces the time it takes to pay vendor bills. Instead of taking several days or weeks to pay an invoice, your processing may take hours or days.

Reduce Inaccuracies and Errors

Automated software and a dedicated bookkeeping team are part of Windes’ outsourced bookkeeping services. Together, these elements reduce errors and inaccuracies in your accounting.

Our bookkeeping team handles hundreds of invoices daily and reviews all processes to ensure accuracy. Additionally, outsourced bookkeeping can catch and return problematic invoices to vendors before they become a problem with your business cash flow.

Save Money and Time on Hiring and Training In-House Staff

Outsourced bookkeeping can help you save money on hiring and training an in-house AP team. In 2020 and 2021, companies spent $92 billion on training their employees. Training a new hire to reach full productivity can take as much as 12 weeks, meaning it takes about three months for their output to match the cost of labor for your company.

When you work with an outsourced bookkeeping company, you pay significantly less for the service than you do over time for an employee. Instead of covering training, salary, benefits, and potential turnover costs, you partner with a team of professionals skilled in the same tasks.

You benefit from their prior training and experience and put your focus back on your business instead of worrying about how AP job performance might negatively affect your bottom line.

Get Professional Outsourced Bookkeeping With Windes

Obtaining professional outsourced booking services can help close AP processing issues and the accuracy gap. Windes offers outsourced bookkeeping services to private companies in the Los Angeles, Orange County, and Long Beach areas. We also provide outsourced accounting services to help your business take advantage of tax credits and dedications.

Talk to a professional at Windes today to get a tailored outsourced bookkeeping plan for your business.

 

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