How can automation help ease accounts payable reconciliation?
Accounts payable reconciliation is the process of ensuring that the sum total of all outstanding accounts payable is identical to the accounts payable balance in the master ledger. This might sound easy in theory, but in reality, as businesses boom, so does the complexity of reconciling accounts payables amount with your balance sheet. When this situation arises, it becomes crucial to pivot your business from the drudgery of manual reconciliation to an efficient automated account reconciliation solution, saving you loads of time and money.
Importance of accounts payable reconciliation
Without timely reconciliations, there could be wide, glaring differences between the amount in the general ledger and your total accounts payable. Mismatch in the bank statement and the general ledger also incur huge losses to the company.
Companies receive up to 500 invoices every month, which means manually checking up to 500 transactions. A single mistake during any of these checks could set you back for the next reporting period. A quarterly reconciliation error means your finance team sifting through roughly 1500 invoices. That’s time that could be utilized to build better financial automation for your company.
An automated account reconciliation solution could help prevent fraudulent activities like duplicate invoicing and reduce manual invoicing errors. One of the benefits of reconciliation process automation is that it raises your credibility in front of your vendors and exposes potential financial bottlenecks in any department.
Best practices for optimized AP reconciliation
Regularly analyzing your financial data and KPIs will keep you informed of your company’s financial performance, potential bottlenecks, and help you strategize your decision-making process more effectively. Consistent monitoring can help you identify fraud, duplicate invoicing, and even reduce compliance risks with a detailed audit trail.
Have you ever heard of the phrase “Too many cooks spoil the broth’? That’s exactly the kind of chaos you want to eliminate with limiting access to master ledger and vendor files to specific individuals such as the accountant, the CFO, and the owner of the company. This way you can keep track of all the invoices with multi-level approvals and reduce expenses such as late payment fees, human error, etc.
No matter the size of your company, the best reconciliation practice you could follow is doing it daily to reduce the risk of discrepancies in your cash flow and loss of credibility. One small error recognized even a month later can throw your company’s bookkeeping process off track. To avoid this, it is ideal to reconcile daily and address issues as they arise.
How can Volopay help improve your accounts payable reconciliation process?
Volopay offers targeted and scalable AP reconciliation solutions for your unique business needs, all the while being cost-effective, easily accessible, and instantly integrated into your existing accounting software.
Capture invoices with smart OCR technology to collect, track, and pay vendor invoices thus eliminating paper receipts and losing documents. Submit all bills on the fly, and ensure that they are approved by department heads and paid on time by the finance team.
Reduce the time it takes to get approvals from different departments. Gone are the days of running around and chasing people to get approvals, with an automated workflow, everyone - from the person who initiated the purchase order to the CFO, will know exactly the data they need to cross off approvals from their list.
Wondering how to automate reconciliations in excel? If done manually, data entry is one of the most important and yet error-prone areas in the accounting process. Not to mention time-consuming! Automate and optimize your data-entry process through smart e-invoicing and seamless approval channels with auto-categorization. This way you cut down your data-entry process!
Volopay provides physical and unlimited virtual corporate cards that come with extremely high security. The amount in the card is always predetermined by you, therefore there is zero chance of overspending. Not to mention you can also enjoy cashback of up to 5% on every international transaction so you can save big while you spend!
A payment reconciliation solution provides the feature of departments for your physical and virtual corporate cards. Whether it’s a one-time payment or a recurring expenditure, your budget won’t budge unless you allow it.
Eliminate manual reconciliation challenges like chasing receipts and double-checking invoices. Accounts payable automation assists you in tracking your expenses in real-time on a user-friendly dashboard. With an overview of your expense log, you can also reap the benefits of faster cash and bank account reconciliation.
How to find the perfect accounts payable solution for you
Automating your AP Reconciliation process sounds like the right fit for your company, but it’s important to narrow down what specific needs you’d like an AP reconciliation software to meet. Here are a few things to consider while choosing the perfect AP software solution for your business:
Does this solution address the key problems I’m facing?
An AP Solution that works best for you is the one that addresses each of your concerns. You can create a list of your concerns and ask the solution provider to show how the software deals with them during demos. Note that while not every solution will be able to provide you with all the answers, it’s important to see whether or not they can provide a workaround or some form of customization for your business needs.
Does the solution adapt to the growth and scalability of my business?
You want an AP Solution that doesn’t just address your present problems but can adapt and support a larger number of invoices and payments, both domestic and international, in line with the growth of your business. Accounting is an indispensable part of your company and therefore you should choose an AP solution that is streamlined with not just your present goals but also your future aspirations.
Is the AP solution software easy to use by my team, my vendors, and clients?
Technology is not everyone’s cup of tea. Most vendors and clients who are accustomed to sending and receiving faxes and physical mails might feel overwhelmed with non-user-friendly software. Therefore, it is extremely important to think of the accessibility concern during demos and check in with your team to make sure that the software aids them in carrying out AP reconciliation easily.
How well does the AP solution integrate with my existing Accounting software?
You are looking for a solution that integrates with your business, not the other way around. Your accounting department might already be using an ERP module, alongside accounting tools. It is crucial to look for an AP solution that seamlessly integrates with any accounting tool you use such as bank account reconciliation software or cash reconciliation automation software.
Is it within my budget?
Any company aims to reduce costs as much as possible, therefore it makes no sense in getting an AP solution software that costs you more than manual labor. Many accounts payable software solutions offer sky-high monthly subscriptions full of features and tools that you may never use in your line of business. Instead of paying for extra fluff, find the right accounts payable reconciliation software that’s customizable and offers multi-level subscription packages.
FAQs
Data is a driving force of any business, and if that data is riddled with errors, it can be harmful to the financial well being of your company. To counteract this problem, it becomes necessary to find an accounts payable software that seamlessly integrates with your existing accounting software, thereby eliminating any possibility of manual data entry error that so often happens when writing in values from one software to another.
Manual invoice approval is a time-consuming process that requires multiple levels of approvals before being processed, leading to delays in payments that can sour your relationship with your vendors. The solution? An AI-powered accounts payable reconciliation system such as Volopay brings all your digitized invoices on one platform for easy approvals and faster processing.
By automating your accounts payable processes, you can easily compile purchase orders, invoices, and receipts for every transaction. Instead of maintaining a separate record, Volopay helps you pay your vendors, maintain a record of the transactions and their documents and easily export it to the accounting system of your choice.
With Volopay, you can easily upload all your invoices onto the application, create a bill, and either pay it manually or automate the system to pay it at a certain date. Alternatively, you can use Volopay’s corporate credit cards to automate spending on one-time or recurring expenses such as SaaS tools, ad spends, etc.