Audits can be stressful for every department within an organisation. Human errors can creep into daily manual workflows and during the auditing process, leading to increased work as businesses try to track and correct the errors. This stress, however, could be mitigated with an intelligent information management (IIM) system, especially one with robust accounts payable (AP) automation capabilities.
Ultimately, successfully passing an audit requires organisation and preparation. The documents and information a team must retrieve and collate might seem obvious, but obscure invoices, vendor data or receipts could be easily missed in a large organisation.
The key to AP automation is in the availability, reliability, and security it offers. Even paper documents can be scanned, indexed and stored, organised into a customised accounting category, and made easily retrievable with a simple search. All critical documents are available in just a few mouse clicks, eliminating many of the mistakes made when gathering paper copies or important documents, such as human error.
Physical paper documents are the bane of accounting teams’ lives, especially during audits. They can negatively affect businesses in four key ways:
Filing and storing physical copies increases the likelihood of losing important papers, which can lead to errors in the audit. Avoiding human error in manual processes is virtually impossible. Usually, errors occur due to incorrect data entry, illegible handwriting, or misplaced papers, which can end up costing the organisation significantly in terms of lost productivity and, in the worst-case scenario, fines due to irregularities found in the audit. IIM systems overcome the challenges of gathering paper copies for review from multiple repositories which may not be labelled correctly, widely accessible, searchable, or secure.
2. Lost productivity
Paper-based processes often require numerous staff members to review and approve each step in the workflow. The more hands that papers go through, the larger the chance of something going wrong. IIM systems reduce the time it takes to gather paper copies from days or weeks to just a few minutes.
3. Delayed decision-making
During the audit process, financial controllers will be unable to get a clear and accurate snapshot of current accruals, recent invoice statuses, disputes, and outstanding liabilities if all paperwork is managed in hard copy. Without real-time and reliable information, it’s impossible to make the best decisions in the moment.
4. Increased risk of fraud
Paper-based documentation makes it increasingly hard to detect fraud. The continuous shuffle of invoices, authorisations, and payments creates confusion that facilitates insider theft and fraud. Without proper controls, it is difficult to spot scams, which can lead to financial losses and, potentially, criminal or civil action against the company.
Moving to accounts payable (AP) automation, IIM systems, and a paper-free environment can reduce audit pitfalls and stress in eight ways:
Audits can be painful and stressful but they don’t need to be. IIM systems that facilitate AP automation and paper-free processes can reduce auditing time, and save an organisation time and money during audits as well as throughout the year. This reduces pressure on accounting personnel and frees them up to focus on proactive and innovative activities that contribute directly to business growth.
Nicholas Delaveris, Alliances and Partner Director – Australia and New Zealand, M-Files