Want create site? Find Free WordPress Themes and plugins.

Auditing in Accounts Receivable used to be a painful process, as it can still be for many businesses.  However, with the advent of e-invoicing this needn’t be the case.  Electronic documents, such as e-invoices, can be searched for and found programmatically – saving hours of rifling through filing cabinets.

Since the 1st January 2013, the European Council Directive requires all EU members to afford the same legal status to electronic invoice processes as they do paper invoice processes.  As a result of this, e-invoices must have associated data guaranteeing the authenticity of the origin, integrity of the content and legibility of the invoice made accessible for auditing purposes.

Electronic invoicing systems are also required, by EU law, to store e-invoices in their original format, as well as an associated human-readable format if the original is purely machine-readable.

The consequence of these requirements is that electronic invoicing systems provide easy access to e-invoicing, invoicing histories and associated documents – typically enabling large-scale extraction and presentation of records for auditing purposes.

When electronic invoicing is done well, there should be full traceability of communication flow and engagement from customers with communications and associated invoicing processes.  Every point of contact and system engagement should leave an trace that can be used to determine the status of payment and/or awareness of payment requirements – supporting associated AR actions to bring the cash in to the business, and auditing this process.

 

Easy risk assessment for auditing requirements

e-invoicing systems enable the following risk assessments to be easily met and even automated.  Reporting on the scenarios below ensures accounts receivable are managed in an optimal fashion and no nasty surprises come to light through the auditing process.

  • Checking for receivables that do not exist
  • Checking for inaccurate receivable balances
  • Identifying incorrectly recognized revenue
  • Identifying collection problems with accounts receivable
  • Checking allowance for doubtful accounts reflects previous bad debt experience
  • Checking for sales transactions not processed in the correct periods

 

Beyond the audit trail – real-time visibility of invoicing progress

The benefits of e-invoicing in facilitating audit processes is clear, but audits should hopefully be few and far between.  A related benefit, more valuable in a day-to-day context, is the ability to have a real-time view of invoicing (and payment) processes.

Leading e-invoicing platforms, such as Netsend, emphasise the use of pull communications (rather than push communications) – meaning that customers are encouraged to click through from communications to an online portal to find their invoicing information.  This enables users to be tracked as they access their invoicing information and take any actions via the portal – e.g. acknowledging receipt of invoice, intention to pay or payment.

This online tracking provides AR departments and credit controllers that ability to quickly identify the status of specific invoices and accounts.  This real-time information can feed into management dashboards and be used to both track and improve business cash flow.

 

Audit trail for document distribution

It’s not just invoicing that can benefit from improvements in tracking and visibility.  Document distribution is becoming increasingly electronic in nature, even for business critical and legally sensitive documents.  With the advent of trust services, defined in the recent eIDAS regulation, more and more legal documents such as contracts are sent electronically; as there can be complete trust in recipient authenticity and content integrity.  This presents and opportunity for businesses who distribute their documents electronically to track receipt and engagement, in much the same way as e-invoicing systems do.

With systems designed to track and record which documents were sent to whom, when, and were engaged with in what specific way, this provides a detailed audit trail for sensitive documents.

Whether businesses need to meet compliance requirements of Sarbanes-Oxley, or other mandates to preserve records and interactions for a number of years, electronic records are a far easier format to store both documents and map the relation between these and communications involving them.

 

Why wait for an audit – turn communication insight into competitive advantage

Whilst e-invoicing and electronic document distribution enable ease of auditing, the insight they can provide is far more valuable for day-to-day business advantage.  Understanding the status of each invoice in the collections process, provides an unparalleled handle on cash flow into the business.  Where anomalies occur, these can be acted on immediately – even automatically.

Document distribution can also provide analytical insights to improve responses and reduce the requirement for exception handling by staff.  With the advent of robotic process automation, and indeed artificial intelligence as part of such systems, manual exception handling can be learned from to improve the scope of automated responses.

Whether communications directly affect cash flow or service delivery, or form part of the broader customer communication remit, knowing whether they have been received and the status of response provides valuable and actionable insight.

In high-churn markets, it’s critical to respond to delays or blockages in customer communications, or risk losing business.  Managing document distribution electronically, and automating where possible, presents competitive advantage in this regard.

Did you find apk for android? You can find new Free Android Games and apps.
Share This