3 ways to add value in Accounts Payable and empower your team

Accounts Payable often can come under much scrutiny. After all, as the holders of the organisational purse-strings, AP staff have a lot of responsibility for spending cash safely. But not many see the function as having the potential to also deliver value and create cost efficiencies. This blog covers ways for larger Accounts Payable teams to kick that presumption to the curb and add value in Accounts Payable.

Increase supplier statement reconciliations

We know, Statement Reconciliation is the job nobody wants to do, and we understand why. It’s long-winded, difficult to stay motivated… it can be downright boring when you’ve been comparing documents line by line for hours with nothing to show for it.

However, with a little bit of help, it can be an effective way to increase ledger accuracy and discover opportunities to add value. We know the benefits of statement reconciliation can include finding untaken credits, discounts and rebates, VAT issues, price discrepancies and duplicate invoices. Taking advantage of all these discoveries can have incredible results. According to IOFM, duplicate invoices amount to around 1.5% of an organisation’s spend. For a company spending £6 million a year, that’s £90,000.

So how can you turn manual statement reconciliation on its’ head with one change? Automation. Statement reconciliation software completes the tedious labour; gathering the data, verifying it against the supplier, comparing both sets of data to find discrepancies. All that’s left is to deal with any issues found. Not only does this save time and improve efficiency overall, but because there’s a far greater yield of results compared to time taken, it makes the whole principle completely worth it.

Adding value by preventing cash leakage

We hate to admit it, but AP teams are only human, and invoice issues can slip through the most carefully crafted nets, causing duplicate payments and overpayments. Cash leakage, which then impacts working capital.

We believe that the best way to combat that and therefore keep that cash in the organisation is through preventative means. We know you may have many controls – 3-way matching in ERPs, manual checks before the pay run, and so on. However, even with these, it’s possible to miss issues like duplicate invoices and potential fraud, which can result in a huge amount of cash leakage.

To help with this, we suggest a preventative measure that is specifically designed to find every single discrepancy within your invoices: Accounts Payable risk detection software. This not only identifies duplicate invoices, but also any PO inconsistencies, unusual invoice amounts, payment methods or invoice numbers. It will also look for dormant and duplicate suppliers, helping you to cleanse your master supplier file.

All these factors can be a root cause of overpayments, and therefore rectifying these before the payment run immediately adds value, as you no longer need to complete so many recoveries. As a result of this, you can reduce the frequency of your recovery audits to save time and cost.

How much value might you find? According to our own data, our customers prevent overspend worth an average of £258,000 per year with the help of our platform.

Adding value by optimising process efficiency

The first step on your journey to optimising your processes is to ensure you’re looking at the right analytics. You need to be able to pinpoint sources of issues, so using reports that let you dig down into the detail, and cross reference sets of data with information such as the supplier, or the staff member who inputted the data, is extremely helpful.

Your next step is to investigate the errors you are seeing, and the time spent doing it. Identifying areas that could be improved and then discussing it with the members of staff responsible will help you see it all in a new light. As a team, you may have ideas that those individuals haven’t thought about yet, thus leading to higher efficiency. You may also be able to develop new controls for data to help prevent future problems.