Regardless of the size of your company or how you structure your accounts payable department (a team, a bookkeeper, an individual company owner), the following two guiding principles for establishing successful accounts payable (AP) processes are universal:
1. Insure the AP process is efficient and accurate.
2. Establish internal controls to safeguard company cash and other investments.
Automating your AP processes allows you to better follow and implement these guiding principles while improving the audibility of processes like expense report and invoice payments.
Improved Expense Report Auditing
Managing travel and entertainment (T&E) expenses is incredibly important for budget-conscious companies. But for companies still dependent on manual processes of matching up paper expense reports with ragtag receipts of all shapes and sizes, ensuring 100% accuracy just isn’t possible. When these paper receipts come up lost or expense reports turn up late, who truly owns the problem—accounts payable or the employee—can be hard to pinpoint. Add to that the time and subjectivity involved in checking expenses against company compliance policies, and process efficiency wanes.
Automating the expense report process from start to finish not only increases the efficiency and accuracy of AP auditing, it ensures many errors in T&E reports are avoided altogether.
- Digital vs. paper expense report procedures allow instant checks to be made against company policies before an expense form can move forward
- Spot audits on approved expense forms (by submitter, by approver, by date range, etc) can be made quickly, with minimal interruption
- Third party requests to audit (by the “home office,” for example, or by government agencies) can be easily complied with.
Improved Invoice Auditing
Digitizing invoice-related documents can ensure the accuracy of information across multiple documents for easier auditing and provide the ability to set better internal process controls.
- Digitizing purchase orders, receiving reports and vendor invoices allow consistency of information across multiple documents and better enables internal control processes like three-way matching
- Digitally identifying which employee/employees are responsible for each match control can reward efficiency, pinpoint mistakes or narrow in on deception.
- Automating invoice processes can eliminate (or very quickly reveal errors during auditing) like duplicate payments and overpayments--even missed opportunities on early-payment discounts.
Switching from manual to automated AP processes (or at least automating as many as you can) makes auditing easier and more effective in several ways. 1.) By allowing digital access to information as opposed to requiring auditors to sift through boxes and boxes of paper files. 2.) By enabling real-time auditing through safeguards and internal controls to be part of a businesses’ day-to-day process.
Find out how iDatix can help you increase the auditability of your accounts payable processes.