Pay Multiple Suppliers at a Time,
With Minimized Risk of Wrong Payment
Doing the Impossible: Multiple Right Payment, with Minimum Check
Imagine that all the effort put into checking a single invoice is mainly to prevent wrong payments made to a supplier, yet wrong payments can still occur. A company accidentally made double payments to its 276 suppliers due to unreconciled payments, directly impacting its financial health as some suppliers still need to refund the excess money.
What is the Cost of Preventing Wrong Payment?
A coffee roasting company that receives supply from multiple sources realizes this issue and wants to prevent the risk as best as possible, at scale. They send POs to numerous suppliers, depending on the specialty of the sourced coffee that the suppliers have. The invoice will be accepted after the order has been received and marked by GR. The checking process begins, and the payment will be executed after all of the information is matched. There are some failure points in which payment can be at risk:
1. Pre-Payment
At this point, the supplier might input the wrong amount into their invoices, be it compared to the GR or the PO. Also, in the high ordering frequency industry, there might be some cases where the invoice is sent based on the wrong PO. Airtight checks must be in place to ensure payment is made for the correct amount, resulting in a very high effort invested in this process.
2. Payment
Payment considerably begins when a payment request is created based on the invoice input in ERP. An error may occur due to human error when inputting the invoice amount. Therefore, the assigned person must be thorough. An approval workflow is usually applied based on the invoice amount to limit the risk of wrong payment.
3. After Payment
After payment has been made, it is also worth verifying if the payment has been made correctly. The finance team can give a notification to the supplier or ask if the funds have been received or not, ensuring that the payment has been reconciled from both sides.
The companies invest a lot of effort continuously, yet information transparency needs to be improved. Disputes with suppliers often happen, especially in invoicing and payment reconciliation, resulting in unsmooth operations in procure-to-pay. Moreover, it is hard for the managers to know what happen at the operational level due to uncentralized documents and data.
How Paper.id Pay the Given Price for You to Ensure Right Payment?
Using paper.id will significantly reduce the operational effort and minimize human errors that cause false payments. Furthermore, paper.id ensures seamless information flow between suppliers and buyers, as well as across operational and managerial layers.
Paper.id automatically checks the invoice amount in regard to the PO and GR. After checking, paper.id also facilitates the approval processes at multiple layers. In case of disputes, Paper.id can facilitate communication between the supplier and buyer via chat capabilities embedded in the document. All document changes will be captured in paper.id and can be accessed by both parties, leaving transparency to all to minimize fraud.
Multiple approved invoices can be paid at once, allowing coffee companies to pay 50 of their suppliers at one time. Leaving only one approval process required each month for the payment process. The payment request is connected to the invoice and the supplier master data to ensure payment will arrive in the correct supplier bank account. Host-to-host payment in Paper.id also provides that payment can be made instantly without having to open another platform and do manual input for payment. After the payment had been made, within 15 minutes, the fund arrived at all suppliers. In short, Paper.id helps to ensure correct payment via:
1. Ensuring invoice amount is right
2. Multiple invoices paid at once using a host-to-host connection
3. The Bank Account is validated, and payment refers to master data.
After the transaction is successfully made, the 50 payment reconciliation will be in place, changing the invoice status from unpaid to paid to both buyer and supplier (via the supplier portal). WhatsApp notifications will be sent in real-time to ensure all parties are informed. All of this process is centralized in Paper.id and can be accessed by both the operational team and managers.
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