Many smaller companies lack formal purchase order systems. In some cases, even if these companies have purchase orders, their use is inconsistent. Or, much of the activity results from services, where the price is not always determined upfront. Thus, controls over disbursements, especially when only a convenient click away, become even more critical.
So, whether the company does not does not require a 2 or 3-way match on each disbursement or sign offs when that does not exist, controls over disbursements are critical. Any owner knows it is always easier to spend the cash than it is to get it back.
Check out this article from the Puget Sound Business Journal on causions about online invoices.
Don’t be so quick to pay invoices online
Customers, vendors and most companies now expect mobile and online billing options. Still, most of us are way too busy to read every word of an online invoice. Your company could be inadvertently paying more than it owes. Advising corporations, I’ve seen this problem occur numerous times, resulting in public relations and marketing departments going over budget. Of course, there are solutions you can adopt to ensure you always pay only what you owe.
The facts about online invoicing you need to know
+ Companies often pay bills quickly, without checking for errors. This costs additional money each month and might even cause budget overruns.
+ When you do find an overpayment, it’s hard to correct. Online payment programs don’t always have the ability to quickly rectify the situation.
+ Research by SIB Fixed Cost Reduction shows that billing errors are overlooked 30 percent more with online invoices than with traditional paper bills.
+ Many online billing systems lack the capability to automate the entire process from invoice to payment. That means there are gaps throughout the course of the online payment journey. This may leave you vulnerable to mistakes and even fraud.
So what is the solution?
Of course, no one wants to go back to the days of thick envelopes full of paper for every single bill and invoice. On the other hand, you don’t want to end up paying more than you have to. Fortunately, there are ways to ensure paying online saves you time and money.
– Review online invoices carefully, including recurring invoices. Watch for rate increases and hidden fees.
– Put a dual-control system in place where one employee generates the payment and another is responsible for approving it. This typically forces you to scrutinize backup documentation, such as receipts and purchase orders.
– Consider hiring expense management or fixed-cost reduction specialists. Using scheduled audits and working with vendors, these businesses help your company avoid overcharges and save money.
Just like PR protects your reputation and brand, you must use all tools available to protect your business practices and bottom line.