The accounts payable (AP) function has never been more important in the eyes of controllers. One reason is that controllers recognize that an automated AP department can help support strategic initiatives for compliance with regulatory mandates. Controllers must ensure that corporate policies and procedures are in compliance with professional standards and state and federal regulatory requirements. Even unintentional violations of laws, regulations and mandates can result in hefty fines and penalties, and significant reputational harm.
As a result, finance executives surveyed by IOFM believe that compliance and risk management is the fourth most-important finance and administration function after cash flow analysis, reducing operational costs, and accounts payable and accounts receivable transaction processing.
But ensuring compliance in a manual, paper-based AP environment is a tall order.
Manual, paper-based accounts payable processes make it extremely difficult to: track invoice history and approvals, ensure consistent adherence to approval policies and separation of duties guidelines, safeguard chain of custody, prevent unauthorized access to sensitive data (such as supplier banking information), readily provide all of the information required for audits, and prevent documents from being discarded or destroyed prematurely. Moreover, in a manual AP environment, staff can back-date documents, make unauthorized payments, or create fake invoice authorizations.
AP automation helps controllers increase control over financial information.
Automated solutions such as NexusPayables create well-defined, consistent processes with clear and systematic assignment of duties. The controls and configurable workflows provided by automated solutions enable organizations to adhere to legal and internal document retention policies.
Automation also provides a complete audit trail for all activities that occur during the invoice processing lifecycle, enabling managers to quickly identify staff involved in any suspicious activities. Detailed tracking of invoice processes also helps eliminate the back-dating of invoices, unauthorized payments, and fake authorizations. What’s more, configurable alerts automatically notify managers when pre-defined data fields have been altered (e.g. payee), or when irregularities are detected.
And electronically storing images and data eliminates the chances of lost or missing invoices, ensuring the integrity of records. Similarly, electronic storage of images and data enables organizations to rapidly audit an entire repository. Businesses can provide auditors with direct view-only user access to archived images and data, eliminating the need to gather and copy documents.
All of this makes more AP a strategic partner to the organization.
To learn how Nexus can improve the strategic standing of your AP department, contact us today.