Finance leaders say data entry errors are a top challenge. How to avoid accounts payable mistakes.

Nobody likes to make mistakes — and that’s particularly true for accountants. The costs and wasted time of fixing errors add up. Airbase recently released a survey with PYMNTS that assessed the state of accounts payable for B2B SaaS companies. The surveyed finance executives identified “data entry errors” as the top challenge for AP teams, and I completely understand their concerns. 

Another survey by the Global Business Travel Association found that it takes 18 minutes and $52 to correct one expense report, but I feel the actual cost is much higher. Mistakes disrupt your focus and damage morale of accounts payable teams and sometimes across the company. And if they’re not corrected, errors can impact cash flow, budgets, and forecasts.

Fortunately, I work at an innovative company whose mission is to address these concerns, so I have access to a state-of-the-art accounts payable platform. Here’s what I’ve learned about preventing AP errors. 

Types of accounts payable errors.

AP has long been plagued by messy processes and systems. And we have a lot of balls in the air at any given time. Here are some of the common things that can go wrong. 

Manual data entry errors. It happens. You know an Uber was $35, but somehow it turns into $53 when completing an expense report. But no judgment: manual processes are inherently error-prone, especially to transposition. 

Paying an invoice without checking the PO and receipts to ensure it’s the correct amount. We all know the best practice is to match the PO, receipts, and invoice, but finding time to root through all those POs and chase down every receipt can delay your close.

Duplicate bill payments. It’s easy to do: a vendor sends an invoice by mail, then again by email, and you don’t have enough visibility to see that you’ve already paid. Or, two employees submit the same expense unknowingly. Since your job is to pay the bills, you move ahead with payment and don’t realize the duplicate payment until month end. 

Slow payments that result in late fees. This one hurts when budgets are tight. Late payments can also damage relations with vendors.

An incomplete audit trail. If you’re not creating the audit trail as transactions happen, compiling the necessary evidence can take hours. This can wreak havoc on a business in the event of an audit.

4 tips for preventing accounts payable errors.

1. Leverage accounting automation.

Accounting automation software eliminates the time-consuming manual processes that are at risk of errors. Some elements that Airbase incorporates include:

• Optical character recognition. OCR technology scans a receipt and automatically fills in the details on an expense report. No more transposing numbers, misreading receipts, or accidentally entering your date of birth instead of the amount (seriously, people do that!). 
• Auto categorization. Instead of expecting employees to know the right GL category for an expense, machine learning can automatically assign a category based on past transactions. It can also curate the categories employees see — for example, the marketing team is given an appropriate choice of categories specific to their team. 
• Automated amortization schedules. We can rest easy when amortization schedules are generated automatically. NetSuite users can even choose from the full library of NetSuite schedules for more complex flows. 
• An automatic GL sync. When all transactions sync directly to the GL, we don’t have to worry about creating errors when importing CVS files or copying information from one platform to another (two time-consuming tasks I don’t miss at all).
• Alerts for possible problems. Automated controls can alert users to possible duplicate spending. One user on the popular review site G2 recognized this benefit of Airbase: “Its strong point [that] has been of great help to me is the duplicate payment alert, because it allows me to detect errors that I can make at the time of payment.”

2. Remove barriers to visibility.

If you don’t have good visibility, you’re at high risk of mistakes. These features provide visibility to reduce that risk. 

• Upfront approvals. A system that approves spending up front means mistakes in a spend request can be caught before the money leaves the door. AP departments, managers, and budget owners can then always have accurate finance information without having to make adjustments at month end, or after receiving credit card statements.
• A single source of truth. Consolidation also reduces the risk of errors. When all bills are paid from the same platform, we don’t have to worry about accidentally paying the same bill twice — one by ACH and one by virtual card, for example. Plus, when all spend is captured in real time, all stakeholders have end-to-end insight into every transaction. 
• A complete audit trail. You can’t do detective work to figure out a mistake without a complete and comprehensive audit trail. When all necessary items are collected in the same transaction file in real time, the evidence is right there whenever you need it. 
• Vendor management. Giving vendors the ability to add and edit their own information ensures it’s always up to date and accurate, which reduces the possibility of late payments. 

3. Implement 3-way match.

Not verifying that a purchase request was filled correctly creates the risk of an error, in addition to making companies more vulnerable to fraud or unauthorized purchases. But matching those three elements — PO, receipt, and invoice — is a notoriously laborious process, leading to inefficient bill payments and even late fees. 

Accounting software that incorporates an automated 3-way match verifies and validates that purchase orders, receipts, and invoices are all accurate. NetSuite users can get access to 3-way match in conjunction with Airbase spend management. 

4. Create processes that factor in organizational complexity.

As companies grow and expand into new markets, managing accounts payable becomes more complicated: foreign currency transactions, dealing with subsidiaries, and more complex workflows and approval chains are some of the obstacles AP departments face. And, of course, more complicated processes raise the risk of errors even further. Spend management streamlines workflows, so AP processes scale with the company. That empowers them to process more transactions with a greater number of variables without having to increase headcount or hours. 

After my years at Airbase, I can’t imagine a career as an accountant without accounts payable automation and a spend management platform. Removing the stress and annoyance of dealing with AP errors is a big part of that.

Watch the webinar about the PYMNTS survey. 

Request a demo to see for yourself how Airbase reduces accounts payable errors.