Decent and cost-efficient accounting isn’t everything about having proficient personnel. It’s also about paying the bills with accuracy. So far, the accounts payable automation movement is going on long enough.
That makes companies realise that even if they haven’t yet got automated completely, they probably should. To improve the payment structures, a business requires AP automation. Here’s more on this front.
When accounts payable departments pay bills, they operate with blind faith that general ledger & AP balances are prompt. And since it’s a manual process, it might take weeks and months before errors get caught. So, what’s the solution?
Following accurate accounts payable reconciliation requires comparing various financial records to ensure everything’s fine. That’s where automated reconciliation comes into practice. Reconciliation is a quintessential practice. Since this manual process is tedious, expensive and time-consuming, companies can consider automation. On this note, let’s read on.
Downsides of Manual Accounts Payable Reconciliation Process
The accounts payable reconciliation method encompasses comparing balances in more than one set of financial records. It’s usually a general ledger & a sub ledger, dashboard, or accounts payable ageing report. The report shows the outstanding balances to vendors and suppliers. Controllers, AP staff, CPAs, and others perform reconciliations manually or implement software.
Even with tools, accounts payable reconciliation might sound like a labour-intensive affair. That’s where the need for automation gets noticed. Here are a few challenges that one may experience with manual accounts payment reconciliation.
1. Deteriorates Employees’ Productivity
For companies that follow a manual process for accounts payable reconciliation, operations may grind to a halt during month-ends. On such days, one who wanders into the AP department may experience stressed-out staff amidst a truckload of accounting reports.
The traditional manual accounts payable reconciliation process is tedious. Thus, it can grate on the shoulders of even the most qualified & experienced staff members. These are individuals who might otherwise enjoy coming to work & helping their companies pay the bills timely. But these staffers are the ones who can tell their boss a whole new story on those manual reconciliation days.
In the manual procedure, personnel requires verifying transactions in the general ledger. As a result, it deteriorates employees’ productivity at work.
2. Time-Consuming Reconciliations
If a company comprises only a couple of transactions to review, it might not be a problem. However, manual reconciliations become quite hefty for professionals who need to undergo a multitude of reports. In fact, surveys suggest that more than 50% of companies have to process over 500 invoices each month.
A higher volume of invoices means a protracted manual reconciliation process. Also, companies need to hand in a lot of invoices that are going to have exceptions. This is where automation software catches and resolves the basic invoice exceptions. A company that implements accounts payable invoice automation can avoid errors and get accurate data.
3. Extremely Expensive
The costs of a traditional manual accounts payable reconciliation process get measured in different ways. Of course, personnel require direct costs and additional time to perform the job. Even for mid-size or low-tier companies, that might be a full day for some payable workers once or twice every month. These days are going to be crucial for personnel to process invoices and respond to queries from the vendors.
All these reasons explain the importance of the automated accounts payable reconciliation process. With it, companies won’t ever again have to spend weeks wondering whether their general ledger or AP reports will align. They can understand when the problem arises and how to address it.
A manual reconciliation process may mean searching for documents in a dirty file room or work desk. At Monite, you can get this problem solved by selecting full accounts payable automation solutions from the team. The professionals help you keep the accounts payable reconciliation process running seamlessly.
With Monite, your clients can send invoices and offers to their clients. They can even collect payments and check analytics. It’s a one-stop solution to custom invoice design, dunning & reminders, auto-payment recognition and reconciliation. Refrain from letting your accounts payable reconciliation procedure grind operations to an end. Try AP automation with Monite to make and let your clients enjoy a seamless reconciliation experience.