Document

Typical challenges faced during purchase invoice attribution

By Annapoorna

|

Updated on: Apr 21st, 2022

|

3 min read

social iconssocial iconssocial iconssocial icons

Purchase invoice reconciliation is a crucial part of an account payables team’s work and is essential for ensuring a smooth business operation. Despite the straightforward nature, there are typical challenges faced during purchase invoice attribution.

Common challenges faced during invoice processing

Since accounts payable is a back-office job, it doesn’t take center stage as businesses look to build a competitive advantage. Most of the time, the accounts payable takes a back seat to the other competing priorities of the management.

  • Wrong or missing line items

Suppliers are just as vulnerable to human error as personnel working for your organisation. A business can’t ensure that its vendor invoices are always 100% accurate. Problems with invoice management might reach deep into your payment cycle before you realise that the numbers don’t add up or spot an exception. Detecting these issues could be challenging when a business is handling hundreds of weekly invoices.

With AP (Accounts Payable) automation, businesses can ensure that the invoice data is validated against their ERP, making it easy to identify duplicate invoices. Also, there is no need to key in the line items or invoice headers manually, thereby reducing the chances of human error.  

  • Too much paper or emails

Although digitising your business could be a time-saver, a cumbersome hybrid between traditional and digital systems would create more problems. With paper invoices stacking up the desk of your AP team and emails seeking corrections, it could be difficult for them to keep track of the vendor accounts.

AP automation eliminates delays in invoice processing, streamlines the entire approval process, and provides intuitive dashboards to users for a detailed and real-time view of invoice processing.

  • Time spent on repetitive & non-important tasks

Generally, the accounts payable department spends most of its time on repetitive tasks such as data entry, following up with banks, chasing down suppliers for information, etc. But there’s growing and constant pressure on the accounts payable teams to free up their personnel to focus on strategic tasks for driving business growth. Such pressure on the AP team to perform value-added tasks such as data analysis, vendor database cleanup, strengthening supplier relationships, etc., could deter their core function.

  • Lack of a single platform for invoice level communication

Generally, suppliers are susceptible to whether their invoices have been received or the status of their invoices when their buyers depend on the traditional method of invoice processing. If the organisation’s AP team is swamped with supplier calls and e-mails inquiring about the status of their invoices and payments, the invoice processing could take a hit due to such situations. On average, 20-25% of an AP team’s bandwidth is spent responding to vendor emails.

A self-service vendor portal can empower a supplier by enabling him to submit his invoices electronically, receive an acknowledgement that his invoice has been received and track the status of his invoices and payments.

  • Several standalone systems

A disoriented & non-unified approach to automate the accounts payable could result in an overall disorganised system. At times, to automate the AP process, organisations have multiple systems through which suppliers can submit their invoices. This could complicate the user experience, make it difficult in accessing critical information and be costly to maintain.

A better approach would be to deploy a single solution that would automate the end-to-end accounts payable cycle with invoice management, vendor management, invoice reconciliation, and vendor payments execution capabilities. Such a solution would aggregate all paper and electronic invoices onto a single platform and offer real-time visibility of the entire process.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

Index

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption