Late fees are an easily avoidable expense. So why do so many businesses pay them? Missing invoices are usually the culprit.
Late fees don’t have to be inevitable for your business. Data analytics can help. Learn more about preventing lost invoices and getting your suppliers paid on time by downloading our free data analytics guide.
Where Do Missing Invoices Go?
Like the match to your favorite pair of socks that’s disappeared in the laundry cycle, it can be hard to pinpoint exactly where in the payment process invoices go missing. Common hangups plaguing the accounts payable department include:
Manual Invoice Processing
Many companies still rely on manual invoice processing, which is prone to human error and can lead to lost invoices.
Paper Invoices
Some businesses still receive invoices in paper format, which can be easily lost or damaged.
Lack of Visibility
In many cases, companies lack visibility into their invoice processes, which makes it difficult to track down missing invoices.
Poor Communication
Poor communication between departments can lead to missing invoices. For example, if the AP department does not receive invoices from the purchasing department, the invoices may be lost or forgotten.
The Consequences of Missing Invoices
In addition to paying late fees, losing invoices can have significant ramifications, including the following:
Financial Losses
Late fees often compound the longer a lost invoice goes unpaid.
Damage to Relationships
Missing invoices can damage relationships with suppliers, which can make it difficult to place future orders. Your supplier will get frustrated quickly if you’re frequently calling to inquire about invoice status or asking them to re-send. Some suppliers may get fed up if your payments are often late and may even choose to cease doing business with your company.
Increased Workload
When invoices are missing, the accounts payable department has to spend time tracking them down, which can lead to an increased workload and stress. This may have a negative impact on talent retention and hiring – who wants to be part of a team using outdated manual processes?
How to Request a Missing Invoice from a Supplier
If you suspect you’ve lost an invoice, it’s best to request another copy from the supplier. Reach out to their accounts receivable department directly via phone or e-mail and ask them to re-send the lost invoice. Being upfront about your mistake is often better than incurring late fees for delayed payments.
Stop Losing Invoices with Data Analytics
Data analytics has emerged as a powerful tool for businesses seeking to streamline operations and optimize financial processes. When it comes to managing invoices, data analytics can play a key role in identifying and addressing missing invoices, helping companies avoid late fees and other negative ramifications.
By leveraging data analytics, companies can implement algorithms and predictive models to detect patterns and anomalies in their invoicing systems. These systems can flag missing invoices by comparing expected invoices against those received, alerting AP teams to potential discrepancies before they escalate into late payments.
Moreover, data analytics can enable companies to analyze historical payment data and supplier behavior to forecast invoice arrival times more accurately. By understanding patterns in supplier invoicing cycles, businesses can anticipate delays and proactively follow up with suppliers to ensure timely invoice submission.
Advanced data analytics can potentially help identify the root cause of missing invoices, whether it’s inefficient communication, supplier issues or internal processing errors. Armed with this information, companies can implement targeted solutions to address the underlying cause and improve invoice management processes.
Data Analytics Within AP Automation Solutions
Some AP automation solutions provide built-in data analytics capabilities. Not only can AP automation increase invoice processing and payment efficiency by eliminating time-consuming manual tasks, but it can empower your team with important information that can help solve a number of challenges, including missing invoices.
For example, businesses that use AvidXchange to automate their end-to-end payables process can create a missing invoice report as part of AvidAnalytics. This report is designed to let AP pros easily view invoices that were expected but never received.
AvidAnalytics’ missing invoice feature works by automatically predicting the billing cycle of recurring invoices using a classification model that looks at past invoices from your suppliers. The Time Sensitive Invoice Analytics report highlights invoices that were expected but not received.
Late fees don’t have to be a necessary evil of doing business. AvidAnalytics helps you avoid lost invoices and superfluous late fees.
Click below to learn more about AvidAnalytics or schedule a demo.
