Financial and accounting professionals have traditionally relied on labor-intensive paper check operations and manual electronic payment services to pay vendors and suppliers. Invoices have to be checked against contracts and payment histories. If this process is not very well organized, it results in late payments, long hours, and confusion.
Manually reviewing all the invoices can create additional expenses such as supplies, stamps, and printer cartridges. In addition, the consequences of making an error during the payment process can potentially raise business-stopping consequences like fraud, audits, and more.
It has become apparent that automating the payment processes can notably improve an organization’s overall financial operations. Automation adds great value to accounts payable, such as real-time visibility into performance and financial status, increased accuracy, and better compliance with tax laws and industry regulations.
If your company is still getting paper invoices or issuing paper paying bills, you’re not capitalizing on the existing best practices. You’re also missing out on the unlimited potential for savings after relieving your AP team of numerous time-consuming non-value adding activities such as opening the mail, data entry, and filing mountains of paper.
Digital capture of invoices, including those that contain unstructured data, paves the way for easy invoice processing.
In some cases if there is a larger payment, or if a payment is required quicker compared to contractual payment terms additional documents such as contracts, a history of payments, and account notes are needed. Such documentation should be securely hosted online in an electronic format and accessible to multiple individuals within the organization
After an invoice is received, the invoice has to be approved for payment. Invoices may need to be matched to purchase orders, and special approvals may also be requested before releasing the payment.
With automated workflow, invoices can be matched to PO numbers and then sent directly into a queue to be approved or denied. Authorized parties can review, annotate, or sign the invoices even from remote locations, making it possible to elicit decisions immediately.
Reasons for an audit may vary from ensuring the effective operation of an organization to an investigation meant to review compliance with a multitude of administrative regulations and many more. The need to comply with tighter and newer regulations in the current economic macro environment is also compelling.
During audits employees have to provide documentation on B2B payments as well as who approved the payments, how they were made, and receipts of payment; proving all these facts can be time consuming in a paper system.
The electronic storage system automatically tracks from inception to completion each payment, vastly simplifying the audit process.
Auditors can be given review access to track the four ‘Ws’ relating to payables transactions:
- Who authorized payment?
- What was authorized?
- When it was authorized and paid?
- Why the payment was made?
Cost of Fraud
It has been estimated that around US $20 billion is lost due to paper check fraud. Almost 94 percent of companies that are affected by payment related frauds are victims of check fraud. The lack of payment verification methods and invoice data matching increases exposure to check fraud-related losses. Companies working with check‐based payment systems maintain an extended stock of pre‐printed checks boosting the risk of theft‐related losses.
With the solution offered by 24Stack you will have real-time visibility, improved accuracy, and fraud detection as well as greater control over every invoice and payment your organization makes.