The worst dream that often haunts your company’s finance department is misplaced important documents such as invoices, purchase orders, or shipping documents. This happens because the finance department is still making purchases manually, in other words, has not switched to purchasing software.
Misplaced or losing these documents will make a lot of people stressed. There are a lot of impacts that will occur due to this incident, but this time we will highlight the 4 most important ones.
Table of Contents
Postpone monthly reports
Monthly reports are the most important thing for the finance department. The accuracy of this report will affect the judgment of all members of your company’s finance department. Supporting documents, such as invoices, purchase orders, and shipping documents must be attached to the report.
Imagine the chaos in the finance department when they are making monthly reports with incomplete documents. Questions such as; “where is the invoice for item A? Who approves this purchase order? Has Shop B sent an invoice or not?” will often be heard.
The absence of centralized document storage will make the monthly report work process complicated and tedious. As a result, there are several things that you can consider. First, postpone the monthly report. Or the second, complete the report even though it is farfetched.
Auditing disaster
If you choose to complete the monthly report, then get ready for the next panic attack, that is, during the audit process. Your performance as a financial staff will be at stake here. If you are unable to provide the supporting data, don’t be surprised if your KPI is far from perfect on employee evaluation time.
Whether it’s internal or external audits, you must provide any data when the audit team requests it. Therefore, it is crucial for your company’s finance department to have a centralized storage location for important documents.
If you fail to show an invoice or purchase order from an item purchase, then surely the audit team will give a yellow card (or a red card if necessary) to the finance department and your company. Suspicions such as embezzlement, or even corruption, will certainly present if this happens.
Inaccurate and unreliable invoice
If your company cooperates with government institutions, then your invoice and work statement must be complete and accurate. If you do not attach the required items, then surely your company’s credibility will be crumbling down.
Misplacing important documents not only impacts the image of your company but can also keep you away from other potential clients. This is why you should start to consider using purchasing software that makes your accountant’s work easier.
Purchasing software also makes it easy to store all your documents digitally. So that at any time you need to find your invoices or purchase orders, you can simply open the purchasing software with your laptop and download it directly from the server.
Three-way match becoming a one-way match
Three-way match is the process of matching the contents of the invoice, purchase order, with the corresponding shipping documents. This process is important to ensure that the invoices you receive match the purchase orders. So that the items sent by the seller and the items you received are the same thing.
When one element of a three-way match is insufficient, confusion happens. For example, the finance division feels that they never made any purchase when suddenly an invoice arrives at the office because there has never been a purchase order from one of the employees.
It is possible that the finance division makes two payments because the invoice is lost somewhere and no one remembers whether they have made a payment or not.
Conclusion
The hellish situation above doesn’t really have to happen if your company has a system that can record everything clearly and in detail. Using purchasing software is a widely used method by accountants to avoid the above problems.
Purchasing software increases your control of company expenses, purchase order accuracy, vendor management, and various accounting activities. For more detailed information about the software, you can try out a free demo by applying here.
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