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5 Pay Run Bottlenecks that are Slowing Your End of Month Process

19th Jul 2023
Brought to you by
Nook horizontal logo
Nook is a powerful payments platform that streamlines the Accounts Payable process, bringing...
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5 Pay Run Bottlenecks

For accountants and bookkeepers, closing the end-of-month payment run can feel like a high-stakes obstacle course. Each cycle means juggling manual data entry, approvals and documentation to help your clients pay suppliers, manage cash and understand their outlays. 

More than just costing your team time and resources, inefficient payment processes have a material impact on your clients visibility, efficiency and control within their business.

Here we explore five common payment bottlenecks that get in the way of a standout accounts payable (AP) process and how you can fix them.

1. Manual Data Entry and Matching Errors

Despite the rise of cloud accounting tools apps, the AP process can be one of the hardest processes to fully integrate. So while manual payment processing is time-consuming, inefficient and error-prone, it’s also an unavoidable reality for many firms to ensure multiple systems are aligned.

For firms with clients managing their invoices through email, cloud accounting systems and separate expense and payment approval systems, matching errors between purchase orders, invoices, and reports can create a stack of corrections come the end of month. 

It falls on the accountant or bookkeeper to sort through invoices one by one, check details and approvals and revert the information back to the client, waiting for their input to be able to balance the books and close the month. In some cases the information needed to properly approve or sign off the month may have been lost in the meantime, leaving either invoices and expenses unpaid, or the books incomplete.

2. Managing personnel and permissions

Payments are a highly sensitive area for any business, oversight and controls are essential. However in many businesses the roles and permissions around  the payment process can be frustratingly opaque, with inefficiency masquerading as security.

After all, the simplest way to maximise perceived security is to limit who can make them. In practice, however, this means the power to approve, share and execute payments can sit with just one or two individuals, with the rest of the organisation unable to track or understand the status of their expenses and supplier payments

On occasions where these individuals are busy, or unavailable, the process quickly grinds to a halt. The same can happen in firms where a single individual may be authorised to manage payments on behalf of a client, and without whom nothing can be paid.

3. Inefficient Approval Workflows and Unauthorised Purchases

In the early days of a business, approvals can be managed on an ad hoc basis between a small team. As companies scale, they need a clear approval process for payments to avoid payment delays, lack of accountability and fraud risk.

Systems for approval often grow organically, based on habit or the capabilities of existing systems. But without a centralised, connected approvals process, assessing, approving and passing on relevant invoices can take multiple teams, messages and queries for every payment and errors can creep in.

Any unauthorised purchases require teams to painstakingly review their invoices to track the approval journey and assess the legitimacy of the expense, tracking exchanges between various systems and teams.

Discovering these errors at month end, this means backtracking forensically with clients to find the source of the error, resulting either in a legitimate payment being delayed or time being wasted catching errors.

 4. Halfway Security Measures

Disconnected, non-auditable payment processes require twice the manual work to keep payments secure and trackable.

This can lead to firms managing a stack of client login fobs, clients having to chase approval documentation and data siloed in spreadsheets only accessible to certain teams, all in order to protect sensitive financial data and comply with regulations.

Not only do these slow down the AP process, they also do a limited job in keeping payments safe, with systems designed to limit access also limiting control and creating a higher likelihood of the wrong invoices being approved in the confusion or data breaches from manual data transfer. 

The solution for data security is not less visibility, but targeted visibility that clients and firms can control, track and delegate, bringing payments out into the open, empowering teams to manage their own needs while creating central control.

5. Early Payment and Double Payment Risks

Payment timing is crucial for cash flow, supplier relationship management and service delivery for clients, but too often accountants lack the key information to adequately manage the payment flow, receiving limited or conflicted reports about what to prioritise.

This can lead to paying a supplier before the delivery of goods or services have been delivered, multiple invoices being generated for the same order, or multiple payments being made due to errors in marking invoices as paid.

Efficient payments require a single, trackable data journey to understand the timings and context of payments for the relevant teams, while also flagging potential errors, risks or overpayments. 

Eliminating your payment bottlenecks 

Payment bottlenecks occur when systems don’t keep up with the needs of the business, and it usually falls on accountants and bookkeepers to fix errors when they arise. Issues with payments create unnecessary client friction, waste resources and limit the scalability of offering AP services to clients.

While solutions for elements of the AP process can help with individual tasks, they only solve part of the issue. To scale payments efficiently, accountants need a connected, holistic process that helps you and your clients track, approve, manage, pay and reconcile payments securely and scalably.

Nook is the comprehensive and flexible AP platform that can enhance any payment workflow, connecting individual apps with complete visibility or managing the whole end-to-end process from a single platform, to help you close the month on time every time. 

  • With tailored controls, it’s easy to assign permissions, approvals and access on a user-by-user basis
  • Nook flags duplicates, errors and outstanding invoices automatically, ensuring a trackable, consistent payment cycle
  • Clients and accountants can make payments securely in multiple currencies without the need for direct bank access or line-by-line spreadsheets

To find out how Nook can help you build a more effective, value-driven payments process, book a demo with one of our Accounts Payable Pros today.

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