What's the Best Practice for Paying Suppliers When Your AP Staff Works Remotely?

ARTICLE - If paying suppliers is harder these days, you are not alone.

• One-third (1/3) of accounts payable professionals are working longer hours since the start of the pandemic, the Institute of Finance and Management (IOFM) reports. In fact, eight percent (8%) of accounts payable professionals are working an additional two hours per day – a staggering statistic when you consider that most accounts payable professionals worked long hours before the pandemic. And more accounts payable professionals would be logging longer hours if their employer hadn’t put a stop to overtime to cut costs during the recession.
• About one-quarter (1/4) of accounts payable leaders say that getting approvals is harder. Thirty-four percent (34%) of accounts payable leaders say it’s taking longer to resolve exceptions.
• Nineteen percent (19%) of accounts payable leaders are “concerned” about their department’s current processes for paying suppliers. Eight percent (8%) say they are “overwhelmed” by it all.

The blame for the longer workdays, slower cycle times, and growing concerns that accounts payable leaders are experiencing can be traced to the operational disruption caused by the shift to remote working. Eighty-three percent (83%) of payables departments are working remotely, at least in part, IOFM found in a recent online survey. No one goes into the office at thirty-one percent (31%) of payables departments.

Adapting manual approaches to paying suppliers to a remote working environment has been hard for accounts payable leaders. Payables departments are relying more on e-mail to onboard suppliers and approve supplier payments. Many payables departments send a skeleton crew into the office each week to open the mail and make payments. Some departments physically transport checks around town to be signed. Others have provided a trusted employee with a check printer and check stock.

But these workarounds for paying suppliers really aren’t working.

Consider the biggest challenges that accounts payable leaders face as their staff works from home:

• Greater risk of fraud. The sudden shift to remote working disrupted established processes and procedures for paying suppliers. In some cases, organizations have been forced to make hard choices between proven checks and balances and getting their suppliers paid. It is no surprise that Interpol, the FBI, the IRS, State Attorneys General, and other law enforcement agencies are warning that fraudsters are taking advantage of the operational disruption.
• More late payments. It takes longer for organizations to pay suppliers when staff work from home. The root of the problem is that only nine percent of accounts payable departments have a fully automated process for approving invoices. And routing invoices via e-mail only provides marginal improvements. Unlike an automated accounts payable solution, e-mails can be sent to the wrong person, don’t provide visibility into the status of an invoice, don’t include alerts, notifications or escalation procedures, and can be inadvertently deleted.
• More supplier inquiries. Suppliers can never be sure where things stand when they do business with an organization that manually pays its suppliers. In times like these, suppliers need to know the status of their invoices and that nothing fell through the cracks.
• Cash flow forecasting is taking longer. Tightly managing cash and spending means more in turbulent times. But businesses can never be sure of their financial position when they use pen and paper, spreadsheets, and proprietary homegrown tools for financial reporting.

Why automate supplier payments

Accounts payable departments must address the challenges created by remote working. There is no telling when (or if) accounts payable teams will return to the office. Employees may be asked to continue working remotely to ensure social distancing. Some organizations may use remote working to provide more flexible work arrangements or as an enticement when recruiting talent. And some organizations may downsize their office space because of the success of remote working.

An ePayables solution – one that combines an online portal, prenotes, approvals, payments, and rich remittance detail – makes it easy and secure to pay suppliers, no matter where payables staff work.

1. A self-service online portal empowers suppliers to submit their contact information, banking details, and tax forms, making it easier for the buyer to start paying them electronically.
2. Automated prenotes validate supplier ACH information, significantly reducing the possibility of payment delays or rejected payments caused by manual keying errors.
3. Configurable payment approval e-mails sent to one or more individuals accelerate the payment process, regardless of the approver’s location or whether they are an ERP user.
4. Payments to suppliers can be made electronically via ACH, card, Zelle, and other methods, eliminating the need for payables staff to come into the office to print and mail checks.
5. Data-rich remittance e-mails can be effortlessly created, scheduled, and tracked, providing suppliers with the payment information they otherwise might call or e-mail about.

An ePayables solution also can be a quick win for accounts payable departments.

An ePayables solution that is native in the NetSuite ERP can be deployed fast, while payables staff work from home and with minimal IT involvement and no disruption to existing processes.

If paying your suppliers is harder these days, iCloudAuthority wants to speak with you. Schedule a demonstration to learn more.