Why accounts payable is a stressful job: complexity, high costs of manual processing, workload distribution, accuracy and delays, supplier relations, audits, complex laws and regulations.
Complexity
The first reason accounts payable is a stressful job, if not the most stressful in any company, involves the complexity of invoices. They can vary in this sense, especially in larger organizations dealing with numerous suppliers and vendors. Some invoices may require additional scrutiny or approval processes, increasing the workload and complexity.
Automated accounts payable (AP) processes and electronic invoicing have many obvious advantages. Despite that, just 39% of organizations have automated invoicing. This means the majority of businesses still rely on manual invoicing, which can lead to errors and inefficiencies.
High costs of manual processing
Data from a survey by the Aberdeen Group show that $15 is the average cost of manually processing an invoice. This includes the cost of work, postage, paper, and printing. In comparison, it costs just $2.40 to process an invoice electronically. The cost is far lower, even accounting for the cost of the electronic processing system. Businesses that still invoice manually are paying a lot more for the same task.
A 2023 study published by Market Watch showed that almost half of finance executives are most concerned about lowering invoice processing costs in terms of AP-related issues.
Manual invoicing costs also include time wasted while waiting for approval. Considering that paper checks still make up two-thirds of all transactions, companies have a lot of opportunities to modernize their workflows. Outsourcing payroll services can be a smart solution.
Uneven workload distribution
The AP departments at some companies struggle with uneven workloads or are understaffed. As a result, accountants get overwhelmed by the work volume and the high costs and can burn out.
Accuracy
Accuracy is crucial in AP to ensure that payments are made correctly and that financial records are accurate. Errors can have significant consequences, such as financial discrepancies, unhappy suppliers, or even legal issues.
Delays
AP departments typically have strict deadlines for invoice processing and payment. Late payments can result in penalties or strained relationships with suppliers, so there’s often pressure to ensure everything is processed promptly.
Suppliers may charge interest or late fees on overdue payments, quickly souring a good relationship with the company. Data from a study by Atradius found that almost a third of suppliers would stop working with an organization if the latter were late in making a payment owed. It’s obvious that maintaining good relationships with suppliers is essential for the smooth functioning of the business. AP professionals need to handle queries, resolve disputes, or negotiate payment terms, which can be stressful, especially if there are issues with payments beyond delays.
Software system issues
The AP departments that rely on software systems for invoice processing, payment approvals, and record-keeping have to deal with technical issues and system errors. They also need to invest time in learning how to work with the new software. This can be frustrating, but it also seems unavoidable, as 86% of CFOs consider digitization of finance processes to be the key to corporate success.
Reviews and audits
AP processes are subject to audits and reviews by internal or external auditors. The prospect of audits can add stress as AP professionals need to ensure that all records and processes are in order and can withstand scrutiny.
Pressure to improve efficiency
In today’s business environment, there’s often pressure to streamline processes and improve efficiency, which tools can help achieve. AP employees may feel pressure to do more with less, leading to stress and job dissatisfaction. The latest statistics reflect this fact: 59% of employees consider technology and tools to be the most important aspect of their job.
Legal compliance
Finally, AP departments must adhere to various regulations and compliance standards related to taxation, reporting, and payment processing. Keeping abreast of these regulations and ensuring compliance can make the job even more complicated and stressful.
Why is accounts payable the most stressful job in any company?
- Complexity of invoices
- High costs of manual processing
- Uneven workload distribution
- Accuracy
- Delays
- Software system issues
- Reviews and audits
- Pressure to improve efficiency
- Legal compliance