Mistakes can creep in when your business involves processing several supplier invoices daily. Duplicates, mispostings, and underpayments can be difficult to notice, leading to inconsistencies. This also means probable supplier credits can go unnoticed. This is why there is a need for digitized supplier statement reconciliation in your supply chain.
What is Digitized Supplier Statement Reconciliation
Digitized supplier statement reconciliation matches a company’s records of what it has paid its suppliers with the suppliers’ records of what they say they have been paid. The aim is to identify any discrepancies so that they can be rectified.
Why Should You Use Digitized Supplier Statement Reconciliation in Your Supply Chain?
There are many benefits of using digitized supplier statement reconciliation in your supply chain; let’s look at ten of them.
When statements are reconciled manually, there is always the potential for human error. This can result in over-or underpayments to suppliers. You can ensure that only accurate information is used for reconciliation by automating the process.
Manual statement reconciliation is a time-consuming and resource-intensive process. You can free up your team to focus on other tasks by automating them. And, because the process is quicker, you can also improve your relationships with suppliers by getting payments to them faster.
Not only will you save on labor costs by automating supplier statement reconciliation, but you will also reduce the cost of late payments. This is because automated reconciliation can help identify discrepancies quickly to be rectified before they result in late payments.
Improved Cash Flow
Improved cash flow is a direct consequence of automating supplier statement reconciliation. It can help to identify overpayments and underpayments quickly. You can ensure that your suppliers are paid the correct amount on time by correcting these errors and improving your cash flow position.
When statements are reconciled manually, it can be difficult to generate accurate reports. The data may be spread across different systems and in different formats. By automating reconciliation, you can ensure that data is collected in one place for easy reporting.
Another benefit of automating supplier statement reconciliation is that it gives you greater visibility into your spending. This is because you can see all payments made to suppliers in one place. You can also track payments over time to identify trends.
Helps Avoid Legal Hassle
If you are audited, automated reconciliation can help with compliance. All payments made to suppliers will be clearly documented and easily accessible. This makes it easier to identify any discrepancies and rectify them quickly.
When statements are reconciled manually, there is always the potential for fraud. This is because paper-based processes are easy to tamper with. Automated reconciliation can help to reduce the risk of fraud by ensuring that data is stored electronically and securely.
Improved Decision Making
Automated reconciliation can help you to make better decisions about your supply chain. You will have access to accurate and up-to-date information about payments made to suppliers. You can use this information to negotiate better terms with suppliers or switch to a more efficient supplier.
A Competitive Edge
You will enjoy a competitive edge because it can help you to improve your relationships with suppliers and optimize your spending. It can also help you identify any potential risks in your supply chain and take corrective action.
There are many benefits of using digitized supplier statement reconciliation in your supply chain. Automating the process can improve accuracy, efficiency, and visibility while also reducing costs. Automated reconciliation can also help you to improve compliance, security, and decision-making. Ultimately, it can give you a competitive edge by helping you to optimize your spending and identify any potential risks in your supply chain.