Common Invoicing Challenges and How AP Invoice Automation Solves Them

Read time: 6 mins
Common Invoicing Challenges and How AP Invoice Automation Solves Them

Managing cash flow is vital to your company’s success, putting the accounts payable department (AP) at the forefront of operations as they ensure you pay each invoice correctly. When you miss your payment schedules, partner relationships can quickly sour and you can lose access to early payment discounts. Inefficiencies and errors in AP also waste valuable resources.

Fortunately, AP invoice automation makes managing your payments easy. Spend management software provides a holistic view of spending across the organization, giving you the accurate, up-to-date information you need to automate and accelerate your AP processes.

Key Takeaways:

  • Manual AP processes can result in lost invoices, matching errors, slow processing, and even fraud. This can waste payroll hours, impact partner relationships, and make it difficult to get discounts for early payments.
  • Invoice automation can be a solution to AP problems by simplifying processes and eliminating the potential for errors and fraud.
  • Successfully fixing the root causes of invoicing challenges and implementing automation requires a full spend management platform that works in concert with business resource planning solutions.

The accounts payable department has so much to do, from managing expenses to paying for services and goods, as well as managing accruals. It can become overwhelming trying to connect all the dots that keep a successful company in growth mode.

Assistance from Coupa’s Business Spend Management (BSM) platform offers a unified solution for managing transactions across procurement, invoicing, payments, and expenses.

Manual invoicing challenges

Why should a company automate AP in the first place? Identifying the top issues in manual invoice processing quickly reveals how AP invoice automation can solve these issues.

Invoices disappear

Lost invoices can mean much more than extra paperwork — they can initiate a spiral of chaos, inaccuracy, and frustration. Manual processes often lead to misplaced invoices, leaving the finance team under pressure as financial data becomes inconsistent.

Moreover, your business may find itself in a difficult position due to unexpected late fees. Late payments frustrate suppliers, making them less willing to accommodate your business when you need favorable terms or leniency at other times.

Automating invoice processes can end these costly errors and concerns. You’ll have no more misplaced invoices or late payments. Additionally, you’ll have current, accurate data to rely on for future planning.

Manual matching processes create errors

Unsurprisingly, manual data entry is the top pain point for AP processes. Manually three-way matching to check that purchase orders correspond to invoices and receiving reports is tedious and inevitably leads to errors. Taking time to correct things slows down AP with ripple effects across the company.

Top pain points from manual AP invoice processes

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Automation effortlessly verifies invoices and flags issues before anything goes too far. Regular bottlenecks and backlogs become a thing of the past.

People bypass AP and spend without authorization

Unauthorized spending can be a pressing challenge for AP finance teams. Such purchases cause extra work as the department must track down and understand where the incorrect procedures occurred.

The temptation for sales or technical teams to use unauthorized suppliers only increases when AP seems slow and unresponsive. This feedback loop creates further delays and backlogs, and a cycle of issues arises as regular workloads fall further back due to the extra effort on resolving unauthorized purchases.

Automated systems for verification can go a long way in remedying this difficult situation. By providing guardrails that employees cannot bypass and quick procurement processes, everyone stays on track and compliant.

Manual processing is slow

Even if everything runs smoothly, a manual invoice process means many pairs of hands may handle your paperwork. The process is time-consuming and can create many errors. Physical payment with checks makes the process even longer.

Such delays increase the odds of late invoices. You then lose additional time communicating and explaining the situation to partners. With AP invoice automation, errors are minimal, and you can quickly resolve the few that may occur.

Manual entry increases theft and fraud

Accounts payable fraud still costs businesses substantial money. One study shows that companies report losing 5% yearly.

Unauthorized payments can result from email scams with fake invoices that look legitimate. With an AP system where the vendors themselves set up their accounts and payment methods, you can lower the risks of theft and fraud.

Complex manual systems lead to duplicate payments

Manual data entry and attempting to work across multiple systems are common sources of invoice duplication. This can lead to accidentally making two payments for the same order, robbing you of access to capital and frustrating vendors as you sort out the mess. Automation catches and prevents these issues.

AP might pay too early

Paying too early can be as disruptive as paying too late. Immediately paying an invoice may seem like the right thing to do; however, if you receive damaged items or something is missing, suppliers may not be so quick to resolve the issue. BSM software helps finance teams schedule payments for sufficient cash flow while covering invoices in a timely manner.

Bringing the power of spend to invoicing challenges

Company leaders have the possibility to transform an organization for the better by embracing the power of spend. Vital spending on necessary software, empowers you to make the most strategic decisions and focus on the work that matters most to achieving your business goals.

Making intelligent decisions for your business requires comprehensive visibility into cash flow and transactions that make up your financial landscape. Whether you're trying to reduce costs, allocate funds, or deliver incentives, understanding where every dollar goes gives you a complete picture of how best to maintain financial health while still living out your mission.

Invest in Business Spend Management and unlock the full potential of your company. With a unified, real-time view of all spending at hand, you can safely secure liquidity while deploying cash strategically. Discover how BSM helps to empower financial maturity as you navigate the market with profitability and responsibility.

Use AP invoice automation to navigate ever-changing conditions

As a finance professional, you realize the difficulty of keeping track of the myriad of invoices coming in and out daily. Having partners who trust and support you along the way is key to guaranteeing a smooth and continuous service supply, even in times of turbulence.

Your AP process doesn't have to be an obstacle. Contact Coupa for help. The team can provide the tailored AP invoice automation solution your company needs to ensure you can document and account for every invoice quickly and efficiently.