- Accounts payable teams face increased pressure to close the books at the end of each month and quarter.
- The accuracy and timeliness of payment activity updates have significant effects on business operations and decision-making.
- An AP automation platform with features like OCR scanning, ERP integration, and document management can transform your month or quarter-end from a source of stress to a seamless process.
Closing the books at the end of the month can be overwhelming. Between ledgers to reconcile, reports to run and records to prepare for audit season, there’s no doubt that AP clerks have a full plate and a lot of stress to navigate at the end of the month or quarter.
Getting your books in order is a must for a fresh start at the beginning of the month, but it doesn’t have to be hectic.
In this article, we’ll touch on some of accountants’ biggest month and quarter-end stressors and how automated AP solutions help calm the chaos.
Addressing Your Quarter End To-Do List with AP Automation
#1: Reviewing Outstanding Invoices
The Challenge:
As the month or quarter-end deadline approaches, AP teams bear the burden of getting vendor payments processed on-time, which often involves the responsibility of chasing down last-minute approvals.
Manual processes delay these efforts, making it harder for you to tie up loose ends. In fact, the average invoice lifecycle for businesses who have not automated their approval workflows is nearly two business weeks. That’s time you don’t have to waste when the pressure is on at quarter or month-end.
The Solution:
Automation greatly shortens the invoice approval lifecycle by eliminating the need for manual intervention and reducing the risk of delays.
AI-powered solutions automatically extract data from invoices, key line items into your ERP, and sync updates to your external software platforms. This eliminates time-consuming manual entry efforts while also improving your straight-through processing rate and ultimately reducing the number of invoices left to close.
Using DocuPhase’s AP automation technology, customers like Alimera Sciences have reduced their invoice processing time by up to 93%. By automating the approval workflow and configuring automatic data synchronization with Microsoft Dynamics, they were able to improve their on-time payment rate and strengthen vendor relationships while giving their AP staff more time back in their day.
#2: Resolving Discrepancies
The Challenge:
Not every invoice is touchless, and according to the Institute of Financial Operations and Leadership (IFOL), invoice processing delays that result from poor exception handling were a top concern for 22% of surveyed AP teams.
As an accounts payable professional, you know the pain of manually matching your payment activity with supporting documents, like purchase orders and invoices and/or receipts. You also know how much more time-consuming that becomes when exceptions and discrepancies arise that require you to manually identify and analyze mismatched line-item costs and quantities.
These discrepancies can be hard to fix, especially when multiple parties like purchasing agents and shipping and receiving clerks are involved. The time it takes to coordinate between departments can impede your ability to close the books at quarter or month-end.
The Solution:
With AI-powered optical character recognition (OCR), the complex and time-consuming process of 2 and 3-way matching can be handled automatically on your behalf.
Automating the extraction and comparison of line-item data from purchase orders with invoices and/or shipping receipts allows for intelligent flagging of inconsistencies. Identifying discrepancies immediately helps to shorten resolution times and prevents a pile-up of unmatched transactions that would otherwise need to be resolved before the month ends.
AP automation solutions that include integrated document management also offer access to all supporting records in a centralized platform. This allows teams to easily find the files they need, review them, and collaborate to resolve exceptions.
For example, maybe you placed an order and have been invoiced for 100 parts but have only received 30 to date. If your receiving department is aware of an incoming shipment that fulfills the second part of the purchase order, they may leave a comment using the platform's built-in annotation tools letting you know it’s okay to pay in order to resolve the outstanding discrepancy.
This simplifies communication, minimizes errors, and increases the speed and efficiency of the exception handling process.
#3: Maintaining Data in Multiple Systems
The Challenge:
Cash flow visibility relies on accurate and up-to-date general ledger activity.
Without this accuracy, departments may make poor budgeting decisions at the end of each quarter, which can have larger effects on the organization as a whole (such as over-hiring due to a poor understanding of revenue forecasts.)
However, maintaining data accuracy across multiple systems can be challenging for teams that rely on manual data entry. Even for teams using partial automation in their accounts payable processes, it may still be necessary to update disparate software platforms manually.
The Solution:
Software integration within your AP automation solution allows you to perform seamless data updates without duplicating entry efforts.
By communicating with external software, many automated AP solutions maintain real-time activity updates as they take place, from procurement all the way through to payment.
This not only saves time for AP teams but also ensures data that's reported in your AP software is consistent with what you see in your ERP or accounting platforms.
Seamlessly creating a single source of record for payment activity allows you to cross one more task off your quarter-end to-do list, thanks to AP automation.
#4: Preparing for Audits and Ensuring Compliance
The Challenge:
For many businesses, quarter-end is synonymous with audit season.
To prepare for internal and external audits, AP teams must supply auditors with documents that support payment activity, including purchase orders, contracts, and receipts.
Many businesses implement separate software platforms for accounting, procurement, payment processing, document management, and workflow automation. This makes it difficult to both find the records needed to support payments and to ensure that each system follows audit rules specific to your industry.
The Solution:
An ideal platform solution for AP processes will cover all of these functions in a single software, making audit preparation easy for AP teams.
By consolidating the entire procure-to-pay process in one place, teams no longer need to pull supporting records from multiple disjointed platforms to fulfill audit requirements.
Moreover, using software for accounts payable that includes secure document storage can simplify compliance with record storage regulations like FINRA, HIPAA, and SOC 2.
DocuPhase has configurable permissions for compliance with these regulations, including immutable record retention and role-based permissions. This helps ensure data safety and compliance with audit regulations all year round, so you’re always ready for audit season.
Conclusion
The end of the month or fiscal quarter can be a stressful time, as you strive to close out outstanding invoices, resolve discrepancies, ensure record accuracy, and prepare for audits. But automation can take your to-do list from stressful to seamless.
By implementing AP automation software with built-in vendor payments, OCR technology, ERP integration, and document management, you and your team can save time, reduce errors, improve communication and ultimately, bring greater success and efficiency to your company.
How else could automation help you complete your quarter-end checklist? Share your thoughts on LinkedIn, Twitter, and Facebook and be sure to tag us @DocuPhase!
