38% of AP Professionals Want to Innovate to Reduce Payment Errors

Digital Business Payments

Businesses all too often receive paper invoices in the mail, and directing staff to manually review and type up the details on these documents can be a major time sink that also creates opportunities for human error to muddle the data.

Accounts payable (AP) departments are exploring ways to accelerate and improve the accuracy of their invoice processing. In fact, 38% of AP professionals want to innovate to reduce payment errors, according to The Digital Shift, a PYMNTS and Corporate Spending Innovations (CSI) collaboration.

More details: The Digital Shift Report

“Accounts payable invoicing errors cause late payments, and late payments disrupt a business’ cash flow and [its] ability to qualify for early payment discounts,” CSI President David Disque told PYMNTS. “Many invoices can be derailed from simple errors, including sending to the wrong person, missing due dates and transposing account numbers. The most prevalent errors are the human ones that are derived from manual processing.”

Modernizing Processes for Business Partners and Staff Members

To process physical invoices more quickly and accurately, companies are including invoice processing automation among their latest updates. Offerings range from optical character recognition (OCR) tools, which can scan and extract relevant data from invoices, to robotic processing automation (RPA), which can rapidly enter invoice data into AP systems.

Businesses that are automating their AP departments are also showing an interest in using artificial intelligence (AI)-powered tools and leveraging AI technology to process vendor invoices at a faster pace than staff could do manually. The tools can also help firms make liquidity management decisions by projecting the amount of cash that AP departments will likely need to have on hand in the near future.

Firms that are modernizing their processes for business partners and staff members are also adopting a variety of digital payment methods, like automated clearing house (ACH) and virtual cards, which can enable them to deliver funds more rapidly. Many are leveraging new app-based tools to help monitor corporate spending and reimbursement requests in ways that are more convenient for remote workforces.

Freeing up Employees for More Complicated Tasks

By automating and simplifying invoice management, advanced technologies like these can accelerate and error-check processes, free up staff to attend to more complicated tasks, and ultimately help fuel business growth and expansion.

“Many businesses may think their AP processes — although not perfect — are working fine,” Disque said. “This way of thinking can cost them thousands, if not millions, of dollars annually.”

He noted that an inefficient AP process can lead to the loss of potential volume discounts, require additional staff and drive up the cost of processing. Buyers that pay their suppliers late can experience harsh consequences, ranging from costly penalties to delayed deliveries or services. Another common error, duplicate payments, can have just as serious of an impact on the buyer’s cash flow.

“Automating AP processes will enable businesses to reduce costly human errors, pay their vendors on time and, with the right payments program, earn net new income,” Disque concluded.