Ask the expert: Accounts payable

Tackling invoice chaos

Q What’s the impact of bad accounts payable processes?

A Small businesses can easily find themselves overwhelmed by the volume of invoices arriving in their inboxes or physical in-trays. Despite best intentions, many of these can be overlooked and mistakes can be made. Some bills will be paid and then not recorded; others will be placed on a virtual hallway shelf where they remain, unattended.

The resulting confusion can prove costly. Payments might be made and forgotten, and suppliers — accidentally or otherwise — may send a bill again, only for it to be paid a second time. Unintentional fraud like this can also happen if an employee is billed and it isn’t communicated to the finance team. In some cases, when they don’t hear back, suppliers will resend the invoice to the finance team, who then pay it directly. Unfortunate cases of duplication like this are not uncommon. And, of course, fraudsters are taking advantage of this, using sophisticated methods to send legitimate-looking invoices in the hope they’ll be paid with little scrutiny.

Q How can we spot it?

A While fraudulent/duplicate invoices appear similar to the real thing, there aretelltale signs small business owners should be aware of. The frequency of billscan change, for example. Suppliers of ongoing services might invoice once a month. If two bills arrive in the same month, it may be worth checking with the supplier before making a payment. The absence of a purchase order number can also be a giveaway; genuine invoices almost always refer to a corresponding PO. Any request for a change in payment method should ring alarm bells, too. Given the demands of running a business, small business owners may not have the time to carry out such due diligence. But keeping an eye on a company’s cash flow is essential. Otherwise, invoice chaos can take over, threatening the company’s bottom line and — possibly — its future.

Q How can we tackle it?

A Automating a company’s invoicing processes will greatly ease the situation. Investing in an automated cloud-based system will enable small business owners to track invoices from the moment they arrive to the moment they’re paid, matching them against corresponding PO numbers. Not only will invoices be paid in a timely manner, but also the risk of errors and duplication will be reduced. Business owners would be alerted should a supplier submit the same invoice twice, or if a particular invoice is about to be paid a second time. Automation can also help prevent fraud. By flagging warning signs such as invoices with no corresponding PO numbers, it can filter out attempts at fraud that human operators may not have time to spot. Small businesses can’t afford to lose money to invoice mishaps. By providing end-to-end visibility and unprecedented attention to detail, automation is a major part of the solution.

Since joining SAP Concur in 2009, Steve Roberts has played a key role in developing the UK business— helping growing companies to transform their manual expense, travel, and invoice processes.

For more than two decades, SAP Concur has taken companies of all sizes and stages beyond automation to a completely connected spend management solution encompassing travel, expense, and invoice.