5 common accounts payable mistakes and how to avoid them

Accounts payable (AP) might not always grab the headlines, but it’s the unsung hero keeping suppliers happy, cash flow steady, and your financial ship from running aground. But when things go sideways in AP management, the fallout can ripple across your entire organization like a stone skipping across a pond. So, let’s dive into five common AP mistakes and, more importantly, how you can avoid them.

Why accounts payable management deserves more attention

Look, AP isn’t just about paying bills—though that’s certainly a big part of it. It’s a crucial cog in the financial machine of your company. Effective AP management ensures that you’re keeping suppliers on your side, avoiding late fees, and maintaining a healthy cash flow. Neglect AP, and you’re opening the door to financial disarray, strained relationships, and possibly even legal headaches.

So, what are the usual suspects in AP blunders, and how can you steer clear of them?

AP Mistake #1: Weak internal controls — courting risk

The fallout from weak controls

Weak internal controls are like leaving your vault door open — sooner or later, something’s going to go missing. In AP management, this can lead to fraud, payment errors, and compliance failures. Without strong controls, your financial data isn’t just at risk; it’s practically begging for trouble.

How Corcentric can fortify your financial security

At Corcentric, we understand that robust internal controls are the backbone of secure AP management. Our Managed AP services are designed to help you mitigate risks and strengthen your internal controls by implementing best-in-class processes and technology. Additionally, our StopFraud offering provides an added layer of protection, leveraging advanced machine learning and AI to detect and prevent fraudulent activities in real-time. Automated alerts and detailed reporting ensure that any suspicious activities are addressed immediately, keeping your business secure. Regular audits—both internal and external—are a non-negotiable part of keeping your financial house in order.

AP Mistake #2: Skipping automation — and leaving money on the table

The upside of automation for AP management

In a world where automation is changing everything from manufacturing to customer service, sticking to manual processes in AP is like…clinging to a rotary phone when everyone else has a smartphone. Automation slashes errors, speeds up payments, and frees your team from the mind-numbing grind of data entry. Plus, it gives you real-time insights into your financial status, so you can make smarter decisions on the fly.

Corcentric’s Managed AP: Where automation meets efficiency

As an example of just how far automation can go, Corcentric’s Managed AP services don’t just automate processes; they revolutionize them. By automating invoice processing, payment approvals, and reconciliations, our solution reduces manual workloads while enhancing accuracy and visibility. With Corcentric, you gain access to real-time dashboards and analytics that offer comprehensive insights into your financial operations. This automation drives down costs, accelerates payment cycles, and ensures that your AP function is a strategic advantage rather than a bottleneck.

AP Mistake #3: Outdated supplier information — the silent killer

The cost of out-of-date supplier data

If suppliers are part of the lifeblood of business, then supplier data is the critical oxygen of your accounts payable management system. If that data is out of date, inaccurate, or incomplete, you’re just begging for trouble—think missed payments, duplicate invoices, and strained supplier relationships. Keeping your supplier info accurate and current isn’t just good housekeeping; it’s essential for maintaining the integrity of your financial operations.

How Corcentric keeps your supplier data current and correct

Corcentric’s services include robust supplier management capabilities that ensure all supplier information is accurate and up-to-date. Our centralized supplier management system streamlines the collection and maintenance of supplier data, reducing the risk of errors and discrepancies. By keeping this data current, Corcentric helps you maintain strong supplier relationships and ensures your AP processes run smoothly.

AP Mistake #4: Fragmented processes — the efficiency handbrake

The dangers of disjointed AP management systems

There’s a reason you keep all your tools in a toolbox; if you had to run around the house every time you needed something, you’d never get anything done. Same thing if your AP processes are scattered across different systems, departments, or even locations: Inefficiency is pretty much guaranteed. Fragmentation leads to miscommunication, delayed payments, a general lack of visibility into your financial operations and very little situational awareness. In today’s connected world, there’s no excuse for a disjointed AP process.

Corcentric’s approach to centralized AP

By contrast, the polar opposite of scattered inefficiency in the AP process is Corcentric’s Managed AP services. It combines service, technology, and financing in one comprehensive entity. As a single provider of technology and services, Managed AP helps you achieve long-lasting results that remove the stress from accounts payable. By centralizing your AP management processes into a single platform, we ensure that all procedures are standardized and accessible, giving you a clear, real-time view of your financial landscape. This centralization reduces errors, improves efficiency, and enhances overall financial control.

AP Mistake #5: Poor communication — the baton that never gets passed

The domino effect of bad communication on AP

Poor communication in AP (especially when it relies on manual processes) is like trying to run a relay race without passing the baton. Or, maybe more accurately, like the kid’s game “telephone.” Information gets passed along, and in the process some gets lost, errors are introduced, and by the end no one knows what’s going on and everyone ends up scrambling. For an AP manager, this can lead to missed deadlines, duplicate payments, and strained supplier relationships—none of which are good for business. Unless you mean risky business.

Fostering clear communication with Corcentric

With Corcentric’s solutions, we make sure your team stays on the same page. Our collaboration tools allow for real-time updates, shared access to crucial documents, and transparent communication channels. But teams should implement a regular structure of scheduled status meetings, ensure task assignments are clear and understood, and foster open lines that will go a long way in keeping everyone aligned and on track.

Fixing accounts payable: A case study in AP transformation

A global distributor’s success with Corcentric

In today’s competitive market, the efficient functioning of departments like Accounts Payable (AP) is crucial for growth. A global distributor of specialty chemicals and ingredients, facing its largest acquisition yet, turned to Corcentric to overcome significant AP challenges, and in the process achieved over $6.5 million in savings with a fourfold ROI.

The Challenge: Maintaining grace (and AP efficiency) under pressure

In a fiercely competitive market, smooth operations in Accounts Payable (AP) can make or break a business. For a global distributor of specialty chemicals and ingredients, the stakes were higher than ever. With 138 sites across North America and over $1 billion in global indirect spend, the company faced daunting challenges: large tail spend, fragmented procurement, and manual invoice processing that led to costly errors, delayed payments, and strained relationships with suppliers. The situation was threatening their entire supply chain, especially as they prepared for their largest acquisition yet.

The Solution: Corcentric’s strategic overhaul

To tackle these issues head-on, the distributor partnered with Corcentric for a transformative AP overhaul. The first step was a meticulous spend analysis to pinpoint inefficiencies. Corcentric then implemented key strategies that would redefine the distributor’s AP landscape:

• Invoice Digitization: Eliminated manual entry errors by digitizing all supplier invoices.
• Automated Matching and Processing: Enabled no-touch, straight-through processing for faster, error-free payments.
• Centralized Payment Process: Streamlined payment workflows with a single point of contact, enhancing control and visibility over cash flows.

The Results: Massive savings and stronger supplier relationships

Corcentric’s solution delivered immediate and substantial results: $6.5 million in savings, $1.2 million directly from the Guided Buying program, and significant improvements in supplier relationships. The success extended beyond North America, laying the groundwork for global deployment and sustained financial management.

Ready to unlock similar value? Discover what Corcentric can do for your AP transformation.