Effectively managing your accounts payable is a critical business process that guarantees you can obtain the necessary assets to keep your business going without overpaying. That being said, you will face many accounts payable challenges as time goes on. The single most powerful tool that you can invest in to overcome some of your biggest accounts payable challenges is a digital document management system. Here are five of the biggest challenges related to your accounts payable that a digital document management system can resolve quickly:
1. Late payments
The last thing you want to do is pay your bills late. Making this mistake can hinder your ability to acquire assets, harm business relationships and cost you money in penalties and fees. Regardless of whether or not your company has the funds, late payments can happen due to a small mistake such as incorrect dates or neglecting to schedule a payment. A digital document management system will prevent errors like these from happening by automatically scheduling accounts payable payments until the account is settled after you initially establish the account.
2. Lost or destroyed accounts payable documentation
As manually managed documents start to pile up, confusion will inevitably ensue. People will be unsure about where a document goes – or worse, make an assumption. As a result, important documents will be lost or even destroyed; your accounts payable documents are not excluded from this. A digital document management system will filter your accounts payable documents away from everything else for better organization, and even protect the documents to prevent accidental deletion.
3. Duplicate payments
Although you want to pay your company's bills, you don't want to pay them twice. A duplicate payment – especially on a large accounts payable – will ruin your budget and potentially cause you to pay more than you owe. Hindrances and miscommunications in the accounting process can lead to duplicate payments. For example, the company holding your note could send out an invoice that reflects your balance before you made the payment; your team could assume that the invoice is correct and make a second payment without knowing it. A digital document management system centralizes the entire accounts payable payment process so that all of the numbers are reconciled and up to date.
4. Over and underpayments caused by data entry errors
When all of the information available is accurate, paying an accounts payable invoice should be simple. All that needs to be done is to match the invoice with the purchase price and the total amount paid on the account. Unfortunately, one of the biggest accounts payable challenges that people face is cutting corners – especially if you have a paper-based document management system, wherein people do whatever they can to save time. A digital document management system delivers accurate invoice and payment data in real-time to ensure accuracy.
5. Processing delays
With a paper-based document management system, every processed accounts payable invoice requires multiple emails, printed and delivered documents, verifications and authorizations. This process is time consuming, to say the least; if a single link in this chain is broken – like key personnel being on vacation – then the process can take even longer. A digital document management system expands account data visibility between your company and the note holder, and allows authorizations to take place instantaneously.
Make paying your company's bills easy with digital document management
You can make some of the biggest accounts receivable challenges things of the past with a digital document management system. To learn more about how to use digital document management to overcome some of your biggest challenges, explore some of our other blogs.
