Typical challenges faced during purchase invoice attribution

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.