Almost all the small businesses we talked to were all looking at ways to streamline their invoice capture and approval processes. They recognized the weaknesses in their current manual processes which commonly included the growing amount of time it consumed, invoices getting lost or waylaid resulting in duplicates which sometimes resulted in double payments, the impact of key supplier late payments on both available credit limits and disrupted supplies and the continual hand-cranked cash flow reporting to juggle available cash.
Given the level of demand for invoice capture AND invoice approval automation from small businesses, we were rather surprised that at least half of the accounting practices we met were more than a little skeptical of the value of automated approval processes for their larger clients, despite providing bookkeeping services to them.
Obviously, for micro-businesses and sole traders where most purchases are made by the owner, often by credit card, approval processes are not relevant. But as a business goes beyond “shoebox” accounting, adds additional staff that buys stuff and starts building their supplier credit accounts, the invoice approval process becomes increasingly important, more complex and more time-consuming.
Based on our conversations at the show and elsewhere, it would seem that many accounting practices are unaware of what happens to an invoice within their client, prior to it being delivered to them for posting. This is a little surprising given how important the capture and approval process is for every business, especially small growing organizations where cash flow management is always critical.
If accounting practices were to ask their clients about their current processes, they will find every one of them is unique and the methodologies cover the spectrum from awful to comprehensive. From their client’s perspective, the better the process, the more time and cost it consumes.
It is a discussion worth having and many small businesses would benefit significantly from good advice. Poor accounts payable processes increase the risk of fraud and even bankruptcy, as it is all too easy for a small but successful business to overtrade and become unable to meet all of their cash requirements from paying critical suppliers on time to maintain supply, whilst simultaneously meeting their payroll, PAYE/NI payments, VAT payments deadlines.
AP automation delivers “Best Practice Audit Compliance” whilst removing up to 90% of your client’s time being spent on invoice capture and approval processes, releasing these resources for more valuable work. It also maintains a real-time cash requirement position from the moment the invoice arrives (including PAYE/NI, payroll and VAT values) and aids good management of critical suppliers to ensure supply and potential grow their credit limits in line with business growth.
But don’t take our word for it, just contact some of your growing clients and ask about the work being done prior to you receiving the invoice for processing, because you are in for a surprise.
The majority of small businesses need help and guidance and if their current accountant is not providing it, there is an ever-increasing probability that another accounting practice will.
For more information on how AP automation can help you achieve world-class operational excellence, download our guide, AP Automation - How to bring accounts payable into the future, by clicking the button below.