The Risk Of Not Using Software For Auditing Invoices
AUDITING INVOICES
Finance Executives grappling with the challenge of modernizing accounts payable (AP) processes are keenly aware that employing appropriate software can bring myriad benefits to their organization. key component of this software is the auditing of invoices, the accuracy of which is integral for the successful processing of payments. Consequently, the peril of not incorporating this functionality into their AP software can carry significant implications.
Maintaining manual accounts payable system, where each invoice is physically sorted, inspected and assessed for accuracy, is largely thing of the past. Such reliance on manual processes is resource-intensive and can hinder the efficient operation of companies financial activities. Yet the lack of automated auditing capabilities within AP software is not an uncommon predicament, with many companies falling prey to the disadvantageous impact of not leveraging this technology.
Not having the ability to audit invoices within AP software entails an increased risk of erroneous payments being dispersed. This raises the likelihood of inadequate payment terms being taken advantage of by vendors, with correspondingly sluggish payment cycles and lax negotiation of discounts. Moreover, the potential for material invoice inconsistencies is heightened, where an acceptable level of control is absent.
In severe cases, financial fraud can occur, with malicious activity remotely undetected. Here, the ramifications can be catastrophic for an organization, with substantial financial losses and raised reputational concerns. Yet, with the adoption of compliant AP software solution capable of auditing invoices, such risks can be drastically decreased.
The necessity of validating the information in an invoice is oftentimes overlooked. Nonetheless, by furnishing an automated auditing process within the AP software, companies can take the necessary measures to ensure accurate payments. This allows for rapid processing of invoices and better grasp of financial flow, placing the organization in more advantageous position when negotiating favorable vendor payment terms. In addition, flagging of erroneous invoices does away with cumbersome manual processes and opens up window for more expeditious payment cycles.
Auditing invoices within AP software allows for the timely identification of suspicious activity and resulting substantive losses from fraud are avoided. Furthermore, manual processing of invoices can potentially conceal greater amount of discrepancies, whereas the implementation of compliant AP software sharpens the spotlight on accounting discrepancies and gives financial executives the insight needed to cover any deficiencies.
The advantages of deploying software with automated auditing capabilities for invoices are abundantly clear for finance executives and their organizations. That said, with the rapid advancements in technology and the emerging importance of having automated invoicing solutions, companies should consider the risk of having no compliance mechanism in place and surrendering to the detriments that inaction may bring.
