Top 3 Challenges with Accounts Payable

Accounts Payable (AP) are important for businesses. It can help the day-to-day operations run smoothly without worrying if the bills are being paid. However, there can be some challenges with AP from time to time that can be prevented.

Challenge 1 - Delivery

The first challenge with AP is how the bills and payments are delivered. The most common delivery method of bills is through US postal mail. Payments are typically sent out by check through mail. The challenge of delivering bills and payment through the mail is lack of postal workers, weather, and mechanical issues. These challenges could cause the business to receive invoices late and payments sent or received after the due date. This can be prevented by having invoices emailed to a regularly checked email address and processing payments online, if possible.

Challenge 2 – Address Change

The second challenge with AP is remittance address changing. The return address for vendors can change from time to time. If not caught while putting in the invoice your payment could accidentally be sent to the wrong address. This can cause frustration for the vendor and business if there is an interruption in service. The best way to prevent payments being sent to the wrong address is to thoroughly check the invoice for changes. This can also be avoided by setting up direct payment with the vendor. This is especially important for important bills such as utilities.

Challenge 3 - Funds

The third challenge with AP is lack of funds. Of course, a business wants to make sure they have enough funding to cover all the bills each month. A lack of funds can cause delays in sending out important payments. This can be prevented by setting up reoccurring alerts for when important payments are coming due. This can help plan for bills that need to be paid each month.

Despite it’s importance, accounts payable also comes with its challenges. The Elevate team at Baldwin CPAs partners with small to mid-size businesses to ensure an accounts payable system that works for the business. Contact us today for more information about how we can streamline this for your company.

This article was written by Maxie Brown. Maxie is an Accounts Payable Specialist with Baldwin CPAs. For more information on the support Baldwin CPAs can provide you, contact maxie.brown@baldwincpas.com.