Marcus RichardsAccount payable and receipt management is prone to a multitude of errors and fraudulent discrepancies. That’s why it’s imperative to cross-check accounts of both the accounts payable and the accounts receivable on both ends periodically.
Companies that deal with an inventory in large numbers can find this process tedious and further prone to errors. Sometimes, the manpower and hours can cost a lot more money than it would cost them to bear the losses caused by the differences in accounts.
However, it’s not a very good idea to let these discrepancies loose as they have the potential to escalate and affect the future stability of operation in the company. Hence, they compare and match up the dissimilarities followed by adjustments or corrections made to the respective accounts. This may either solve AP/AR problems or vendor/supplier claims serving the interests of all parties involved.
While there are several ways companies tackle the heft of supplier statement comparisons, one of the best ways is to automate the whole process using supplier statement reconciliation such as AP Matching. Companies such as Mercedes Benz, Netflix, and GE Healthcare use their services to reconcile their supplier statements and rectify errors beforehand.
Now let’s look at a few ways how supplier statement reconciliation automates and eases supplier statement comparisons and save a ton of costs for large businesses.
Automating Traditional Account Comparison Methods
The oldest and truly traditional account comparisons were manually done using paper. Still a lot of small, medium, and even large companies use this method for a lot of their operations. Then comes the use of spreadsheets with Excel sent via emails in the same format or PDFs that are in turn printed out on paper that goes into the archives.
Again, as we discussed earlier, as companies evolve, operations evolve and the number of errors and chances of discrepancies grows exponentially. Reconciliation automation can significantly speed up the matching of the otherwise traditional mode of statements. They automatically flag and highlight payable exceptions that are far easier to track and solve.
Timed Automation
Automation software or integrations come with a lot of features depending upon the version users or companies pay for. One of those perks is scheduling specific activities or operations according to the periodical needs of the respective operation. Here, the supplier statement reconciliation software automatically checks and performs comparisons daily. This avoids both backlog buildup as well as saves costs and time significantly.
Automatically Flags Missings
Automation technologies are smart. The main purpose of reconciliation automation is to catch and flag inconsistencies during various account comparisons. Here the automation software verifies all the invoices, transactional information and highlights inaccuracies on the go. They are easy to track and can be solved as soon as they alert the concerned personnel.
Flags Incorrect Postings
Automated supplier statement reconciliation software discerns erroneous data such as duplicate entries, credit/debit information, and typographical mistakes. Accurate detection of these details is sometimes automatically corrected by the software itself or alerts the concerned team if needed.
Form Discrepancy Patterns
Supplier statement automation software can detect and form a pattern from frequent discrepancies found with certain vendors or suppliers. They automatically prepare a detailed report that highlights these common occurrences and flag the respective suppliers whose discrepancies are correlated. This allows the concerned team to track down these problems to the root and finetune key suppliers periodically.
Conclusion
Automation software delivers accurate information and solutions with smooth daily designated operations. This enhances business metrics such as cash flow forecasts, stipulated time for approvals and as a result generates fewer supplier inquiries. In short, automation improves business functions in multiple domains. Proactively resolving related issues means paying suppliers on time, reducing erroneous payments, maximizing discounts, and minimizing late payment charges.
