Common Accounts Payable Risks and Ways to Reduce Them!

Whether it’s online or in the real world, risk management should be a top priority for every company. When it comes to accounts payable, it’s important to be aware of the risks that come with it. The minutest of AP fraud can cost businesses thousands of dollars.

Some common AP risks with relevant solutions:

Manual Data Entry Error

Human data entry error is common in AP. Almost 88% of manual AP processes are vulnerable to data entry errors, a big risk for any business.

Solution: — ‘Smart’ software can eliminate manual errors. Use good data entry software with features like OCR and ICR.

Payment Error

Payment error is most diligent and common in any company’s AP dept. It reflects badly on your business even in cases of minor errors. So, reduce payment errors such as late or double invoice payments.

Solution:- For all vendors, set appropriate code for account control. Use a system for creating account ledgers/control codes or vendor designated identifiers.

Insufficient Encryption or Security

Nowadays, data security is a primary concern for many businesses in the accounting field. AP compliance and regulatory standards are as substantial as encryption defenses and to streamline your AP tasks.

Solution:- Use a complete AP software comprising standard encryption features (with automatic data saving) and security.

Complicated Internal Processes

This includes underutilized/ overworked personnel, disordered paper, and digital invoicing (spread on various platforms/software/apps), inefficient managers/workflows.

Solution:- Clearly define each invoicing task to personnel to be executed in a single software.

If you are also witnessing these AP risks, feel free to contact Cogneesol for an optimal solution. We hold expertise in AP processing and will provide you with accurate invoice processing and accounts payable services.