Few, if any, companies are fully self-sufficient. From inventory to office supplies, your business likely works with – and owes money to – at least a few other companies throughout the course of normal operations. In the early days of business, these obligations are small and potentially insignificant, but as you grow and develop, the number of accounts you'll have to manage may become too much to handle.
A manual approach to invoicing may be easiest in the beginning, but over time, maintaining spreadsheets, reconciling amounts by hand, and making physical payments will require an unreasonable time commitment. Instead of investing hours into accounts payable, cloud accounting software can provide an automated alternative that saves time, energy, and money.
The Challenges of Accounts Payable
The accounts payable process can be quite long and drawn out, especially when you're attempting to do things by hand. Manual methods can pose numerous business challenges, from organization to reconciliation.
- Receiving and organizing invoices by hand leaves a wide margin for error. Unless your accounts payable team is diligent, it's easy to mistype invoice numbers, misread due dates, or improperly categorize documents.
- Reconciliation is a large part of AP processing – in other words, ensuring the bills you receive match up with the entries in your bookkeeping systems – but doing checks by hand can increase the odds of errors, especially if there are no measures in place to ensure numbers tie out.
- Transposing invoice data, whether scanning or typing, into a tracking system is also time-consuming, and one keystroke or poorly managed scan can be all it takes to miss a payment or pay the wrong amount.
- When invoices are manual, payments tend to be manual as well, resulting in handwritten checks or bank transfers requested one by one.
Make Life Easier With Automation
An automated approach to accounts payable can go a long way in streamlining the process, helping to ensure all invoices are correct, organized, and paid on time. The right cloud accounting software has a lot to offer, boasting automated assistance for every step.
Organize and Categorize Invoices
Automated solutions can ensure every invoice received is categorized by vendor, purchase order, number, or amount, helping you to better manage payments due as well as all relevant deadlines. This can also speed up the approval process, instantly notifying those within the correct departments that an invoice has been received. With the ability to interpret different file formats and delivery methods, automation makes sure you never miss a beat.
Data Capture and Validation
Instead of parsing data by hand, an automated tool can capture everything you need to know. This significantly reduces the likelihood of errors, improves cycle time, and ensures data entered into your system is consistent.
Blindly trusting the information captured in an invoice can be inherently problematic and can easily lead to overpayment. Automated software can ensure every invoice is correct, cross referencing purchase orders and receiving reports to confirm a match. This eliminates the inefficiencies associated with the manual process and reduces the risk of making an incorrect payment, helping you to keep a close eye on cash flow.
If your accounts payable processing is causing more pain than gain, automation may be the right solution. SoftLedger accounting software can provide fast and flexible small business solutions, ensuring a streamlined process that can help you save both time and money.