Most finance teams don't notice their AP process has pitfalls or lacks scalability until it's already costing them. By then, invoices are backing up, approvals are stuck in someone's inbox, and month end close takes twice as long as it should. Often times, growth exposes cracks that manual processes were never built to handle.
In this post highlight some of the common bottlenecks that hinder scalability so you can spot them early before they become a problem.
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If you and your AP team are finding that approving invoices is taking more than a week out of every month and creating contentious situations, the problem isn't with your team. It's a problem with your process. Manual routing by email or even dropping a physical document on someone's desk doesn't scale. Your process might have worked at 200 invoices but it breaks down when you start topping 2,000 invoice approvals every month.
Often times when your month-end close seems to be harder with every period, a slower close is often caused by AP data not syncing cleanly with your ERP. If you find your team reconciling by hand, manually verifying GL codes or digging for missing POs, your integration might not be working the way it should.
Are you seeing duplicate payments, mismatched POs, or GL coding errors as a regular occurrence? This is a symptom of a manual process or a legacy software solution that doesn't holistically process invoices so that capture, matching and pay fulfillment are handled through a single platform that intelligently matches, routes approvals and flags exceptions.
When your business begins to grow and invoices become a constant stream, spreadsheets just don't work. Real-time insight into financial health is a more important than ever and having access to accurate assessment of how much money you owe is crucial to that. This should take hours, it should take seconds.
Increasing headcount isn't the solution to these problems. If your AP process is stressful, hiring another clerk won't ease tensions. It will likely result in another stressed out person on your staff. That only means more net stress.
The right fix is to reduce friction in your process first. Then grow your headcount as needed.
At Fidesic, we help finance teams by doing more than just selling software. We offer advisory services to help optimize your process and deliver custom solutions to meet your exact needs. We specialize in helping growing companies improve scalability and reduce stress for multi-location accounts payable processes.