When your company scales globally, the number and complexity of invoices will inevitably increase. They come from suppliers around the globe, from different locations, and in various currencies. With more and more invoices, it becomes increasingly difficult to avoid errors and waste time but also to keep an eye on cash flow and ensure the company stays cash positive. For instance, one of Fyorin’s clients, Veracloud, mentioned that they were processing around 100 bills per month in various currencies. Unfortunately, during the early stages of their global expansion, many companies fail to automate their payable process to reduce errors, increase efficiency, and save money. Even after automating, it is essential to keep assessing how efficient processes are to avoid problems that could impact future business operations. In this article, we will discuss the key things you should consider when assessing the efficiency of your payables process and the ways you can improve it.

Anti-money laundering (AML) regulations are among the primary concerns when it comes to managing payment security on a global scale. Each country has its own cross-border payment requirements, ranging from documentation to compliance. Before establishing financial operations in any new country, businesses must thoroughly understand these requirements and ensure compliance with AML laws.

A payment provider that simplifies compliance as an SMB expands into new regions and currencies can ensure that no illicit activity takes place, as well as unburden the financial team and increase efficiency. Such providers streamline documentation, facilitate compliance with AML regulations, and verify beneficiary details to mitigate the risk of payment fraud.

According to Ardent Partners' report, in 2022 51% of companies reported that the top challenge in the accounts payable process was invoice exceptions. An invoice exception is any error on an invoice - from a mistake in the address number to a wrong amount that causes the bill to be returned to the supplier. This back-and-forth causes major delays and adds to the manual work for the financial team when their efforts and time could have been better spent on more strategic tasks.

Issues are also often discovered in later stages, after approval, at the payment execution when beneficiary details are incorrect. It's highly recommended to use accounts payable software and payment providers that can pre-verify some of the beneficiary details before sending payment to prevent errors and fraud. These software providers usually allow you to create contacts if you use a supplier frequently and set up robust approval processes to minimise risk of errors.

Have you ever considered how much time passes from the time an invoice is received to when it’s fully reconciled in the accounting tool? Or even how long each step of the accounts payable process takes - approval, payment, and reconciliation? Keeping track of the time spent on each leg of the process can help you identify problems and improve efficiency.

The first step is streamlining the approval process - can any invoices go through a fast-track approval process and be paid right away? Another point worth considering is how to guarantee immediate processing from approval to payment so that once the invoice is approved, the payment can be expedited immediately? Manual steps in an AP process will slow it down and make it more error-prone, as each mistake will need to be corrected manually.

During reconciliation, clients often report problems matching the invoice to the transaction in the accounting tool. A further layer of complexity is added when the invoice was issued in one currency but paid in another, because the FX at the time of the transaction needs to be entered in the general ledger. That creates a lot of manual work for the finance team, and if an invoice isn't marked as paid, it can result in duplicate payments.

Touchless processing and reconciliation with integrated accounting can solve this problem. Integrating your accounting tool with your payments platform allows you to centralise bills and automate accounts payable processes from receipt to reconciliation.

It may be difficult to estimate the cost of processing a single invoice, but you can get an idea by considering factors such as software, labour costs, overheads, and situations such as double payments. Double payments are also more common than one might think, with organisations in the US estimating that even 2% of invoices are paid twice. Fraud is another way your business may lose money through accounts payable. It’s estimated that a typical business loses around 5% of its yearly revenue to fraud. The most common are email scams where fraudsters impersonate a supplier and send an invoice requesting payment.

With a robust accounts payable process and integrated accounting system, you'll reduce fraud risk through anti-fraud measures and stay on top of your bills. Having all your bills in one place makes it easy to see which ones are due soon and take advantage of early payment discounts. In the first 10-15 days, discounts can range between 1-2% of the total bill, which will positively impact your cash flow and bottom line.