Towards Fidelity with the Centralization of Accounts Payable Processes

By: Banking CIO Outlook | Monday, June 03, 2019

Payable processFREMONT, CA: The world's rapid transition towards digital technology makes it essential for businesses to adopt a more strategic approach to managing their business activities. Cash flow management is an important task to be handled carefully by enterprises. To have a clear track cash flow accounts payable, and accounts, receivable are needed to be accurately recorded. Accounts Payable may not be an overwhelming task; to fuel growth, it's all about freeing up working capital.

Typically, financial teams audit invoices after being paid—sometimes months later. Clawing back erroneous payments and detecting fraudulent spending can become increasingly difficult as time fleets. Even if they can eventually recover it, there is a significant cost not to have that cash on hand. To avoid this, simplify the audit process to ensure all review of spending occurs before payment is made.

Understand the terms of the contract to avoid violations of the payment term. Stay on top of related discount chances and validate invoice amounts against contract terms for early payment to save money. Review the vendor invoices to ensure that they comply with any terms agreed in the contracts.

Enterprises often use dozens of contractors, ranging from operations to IT, for various services. It is essential to determine the working patterns of contractors and service providers. By monitoring their use of system log-ins, key fobs, and volumes of email, it is possible to identify whether the level of worker activity matches what is invoiced and ensure that the quantity on the invoice matches the amount on the receipt and document of inventory.

Auditors are tasked, with handling thousands of invoices each month, and it would be difficult to examine each item manually to detect suspected fraud, such as fake invoices, shell companies, or vendor impersonations. Using Artificial Intelligence technology powered invoice auditing tools, the team can ensure that all invoices are accepted for the right amounts, and are paid to the right vendor, and fit the contract terms negotiated. This helps to remove auditors from manual reviews so they can concentrate on more critical initiatives. Auditors should be solely responsible for validating invoices and working on the assumption that the services for which they are billed have been delivered as agreed.

The process of accounts payable affects the trusts between an organization and its suppliers. The right partners ensure operating margins are maintained and support the performance of the bottom line. This can ramp up corporate cost management when effectively approached, minimize risks, minimize proper complexity, and strengthen vendor contract compliance.

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