4 Common problems in accounts payable

Double payments. 

This issue may occur if your vendor unintentionally double bills you. For example: if you paid the 1^st invoice right away, but before your vendor updates your account, the same bill may be mailed out a 2^nd time because your payment wasn’t posted at the time the 2^nd invoice was mailed out. This may lead you to think you haven’t made a payment yet so you mail another payment so your payment won’t be late.

Making a payment prior to delivery. 

Although there are benefits to paying an invoice as soon as you can, what if your shipment arrives and it’s damaged or has missing items? You’re not only out the amount you paid upfront on the invoice for merchandise you don’t have, but you will have to wait even longer for a replacement shipment.

Matching errors. 

If there is a discrepancy discovered between purchase orders, invoices, and other documents, a manual investigation is often required. This error may occur when you pay multiple invoices with one check. For example, You have 3 invoices and all the invoice numbers won’t fit on your payment documentation line. Your vendor may apply the whole amount to only 1 invoice instead of dividing the payment between the 3 intended invoices. Therefore, creating past due accounts on the other 2 invoices and making things more complicated.

Vanishing invoices. 

Sometimes invoices get misplaced or even accidentally destroyed before you are able to enter the data in your accounts payable system. Also, when you’re using digital invoices, you may have a hard time knowing if you have the original or a duplicate invoice.

How to solve these issues?

Update the A/P internal controls. 

You’re accounts payable team can help update the internal process. Be sure to document how the invoices should be handled. You should pay special attention to the separation of duties and full use of the purchase orders to be sure your invoices are accurate.

Use one inbox for A/P. 

When you have all your invoices go to 1 inbox, it will help reduce any chance that an invoice will be paid or received twice. You should also limit access to this billing address for authorized personnel.

Limited access to your cash accounts. 

It’s essential that no one without authorization to your cash accounts, review bank reconciliations. This will help to find potential fraud that may occur as well as uncover potentially erroneous payments.

Use caution with ACH. 

You should ensure tight control of a vendor’s automatic access to your company checking account needs. Ensure that you are receiving supporting invoices with your payments and that any automatic payments are on a timely basis.

Track key performance indicators. 

Create reports for all paid and unpaid invoices. Check out bank security features that will help identify duplicate payments and allow you the ability to control checks for confirmed payments. Your accounting software should help you identify duplicate invoice numbers and duplicated amounts.

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In my conversations with many C-suite executives, I have observed that diversity, equity, and inclusion initiatives are often approached by organizations and the leaders within them as a “feel-good” initiative – the right thing to do. Diversity is so much more than that. The tenets of diversity and inclusion are a moral imperative for all of us. Deep organizational changes are usually required to begin to approach the goal of being a diverse and inclusive environment. This effort may seem daunting and, in some cases, may be difficult to get the buy-in to launch.

Fortunately, there are very real financial reasons to embrace diversity, as well bringing yet another reason to the table to support necessary organizational change and another measure for the results of investment in these initiatives.

As with any initiatives, leadership teams would be remiss if they did not question the impact of dollars and long-term results. Without a doubt, diversity drives dollars to the bottom line, increases shareholder value, and is a characteristic sought out by investors. Let’s examine just a few of the many data-driven reasons to focus on diversity, not only because it is the right thing to do for business, but because it is also the smart (and profitable) thing.

Diversity Improves Problem Solving and Decision Making

Companies that demonstrate diversity in the workplace can examine issues and decisions from multiple points of view and solve problems in different ways. As mentioned in the Harvard Business Review article “Why Diverse Teams Are Smarter,” diverse groups raise more facts in their problem-solving processes than homogeneous teams, and when errors occur, they are corrected faster. In a PNAS study where financially-oriented participants were placed in either ethnically diverse or homogenous teams and asked to price stocks, the diverse teams were found to be 58% more likely to price stocks correctly. This is but one of countless examples of how diversity leads to better decisions and takes away blind spots that would otherwise be present but undetected. Further, reducing these blind spots also reduces an organization’s exposure to a variety of risks.

Diversity Increases Productivity

The Network for Business Sustainability cites research showing that “a 1% increase in racial diversity similarity between upper and lower management increases firm productivity by between $729 and $1590 per employee per year.” This evidence came first from studying tech organizations in a given period and showed even greater productivity gains in comparable diverse Fortune 500 organizations. Diversity improves productivity in part because of the widened perspectives previously highlighted. It instills the ability to examine tasks and strategies from multiple angles and allows organizations to pursue those that are the most advantageous. Productivity gains from diversity also stem from more effective communications and interactions when people see others like themselves in an organization, including presence on upper and lower management teams. Diverse teams empower more people to feel heard and allow leaders to tap into new approaches, interpretations, and perceptions that drive innovation at higher rates than homogeneous teams.

Diversity Expands Customer Base and Revenue Streams

Broader representation within an organization also permeates areas such as product design and marketing and fosters overall innovation. In short, wider collective inputs lead to insights that expand views on what is possible and what is wanted or needed from both current customers and groups not yet served or marketed to. The beauty industry provides a great example of diversity’s expansion power. When cosmetics companies used inputs to recognize that skin tones are not simply light, medium, or dark, new shades and products were formulated to individualize offerings and revenues soared. At the forefront of this was Fenty Beauty, which launched in 2017 and was lauded for its 40 shades of foundation and commitment to inclusion. The company generated $100 Million in its first 40 days, now generates more than $570 Million per year in revenue, and has an estimated worth of $12 Billion.

Diverse team members will often drive conversations that lead to the expansion of products and services to address segments of the market that might have been otherwise ignored or missed. This is reflected in simple customizations leading to expanding SKUs; for example, when a manufacturer of leashes and accessories for dogs expands its products to address needs for service dogs based on input from the disability community. Customer experience is also taking the forefront as a brand differentiator, in many instances surpassing products and price. A diverse team will lead to better connections and better communication with a broad customer base, playing a key factor in customer satisfaction and brand appeal. Some brands will focus on specific segments of the population, and that might be a great niche, but others might simply be missing out by not reaching other groups. That means leaving money on the table and not serving potential consumers.

Diversity Improves Employee Retention and Acquisition

Most companies are competing for the right talent. CFOs and CHROs must take a serious look at the cost of talent acquisition and, what we all hate to think about, the cost of a bad hire, which can be close to 30% of their annual salary, according to the U.S. Labor Department.

Employees in diverse companies report that they feel more at ease and that their contributions are both appreciated and recognized. These feelings lead to increased loyalty from employees that in turn leads to higher retention and longer tenures. Anything a company can do to retain its talented employees directly impacts the bottom line in a positive way, as it reduces the time and expense associated with having to find, hire, and onboard new employees. Improved retention also increases employee morale and productivity in general.

Diversity also improves talent acquisition by expanding the pool of candidates made available to an organization, reducing the time and related costs to fill positions. Individuals want to feel represented in an organization and see that there are opportunities for advancement based on merit, not on unspoken norms and discriminatory criteria. This includes adults with disabilities, a group that experiences the highest unemployment rate of all minority groups. Organizations who make accommodations and take actions to welcome disabled individuals and other underrepresented groups into their workforce gain an incredible opportunity to strengthen their business.

A Positive and Profitable Path

Diversity and inclusion must be more than a feel-good initiative that organizations casually pursue. Organizations need to approach diversity actively and with intent. It will not result from simply having “we-welcome-everyone” statements on employment applications or other communications and by just saying all the right things. It won’t happen just because you’ve had all staff participate in training. Legitimate, significant change must permeate all processes within an organization, impacting employees, customers, and markets alike. The rewards for companies that achieve this go well beyond knowing they have done the right thing.

CFOs must embrace diversity, equity, and inclusion initiatives…not only because it is the right thing to do, but because it will deliver profitability, long-term sustainability, and so much more for their businesses.

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Create an Environment of Confidence and Self Solving

When employees seek answers to “what should I do?” about a variety of issues, what they are often really seeking is reassurance or validation for an answer already within them or simply for someone they trust to point them in the right direction. It’s important to pause before presenting solutions and instead ask, “what potential paths have you thought about thus far?” Doing so frequently reveals that the employee is on the right track and presents an opportunity to reinforce their thinking, shore up any gaps, and create a collaborative dialogue that promotes growth and trust.

Understand and Embrace Individuality

Processes, by nature, are prescriptive. Still, virtually every employee brings a different style, tone, and approach in carrying them out. So long as nuanced differences like these do not present definitive problems, allow employees to put their own spin on organizational practices and perceived norms. Doing so not only makes employees feel more comfortable in getting their work done but also opens eyes to different ways of doing things that may be found to be advantageous for others to follow as well.

Be an Ambassador and Advocate for Your Team

Leaders should never lose sight of the fact that employees don’t have the same volume of senior-level interactions as they do. Great leaders are deliberate about elevating ideas from their teams and championing their skills, capabilities, and results. Encouragement and credit where credit is due to building greater trust and moves organizations towards a culture that crowdsources solutions at every level.

Find the Motivations That Match People’s Personalities

Embracing individuality as explored earlier also means recognizing that people respond with more positivity to motivations that match their personality and preferences. As a former leader phrased it, “I treat people the same, but motivate them differently.” A previous post on understanding team makeup and personalities noted iconic football manager Sir Alex Ferguson’s rejection of a motivate-everyone-the-same approach. He knew that he could fiercely admonish a player like a star forward Wayne Rooney because it fueled the player to step up his performance and show others what he could do. Ferguson also knew that the same approach with another, the perhaps younger or less experienced player could cause that player to crumble.

Create Opportunities to Lead at Every Level

Just because someone doesn’t occupy a senior-level position within an organization doesn’t mean they can’t be an effective leader. Senior leaders should actively seek out and create opportunities for employees to demonstrate and develop leadership skills at every level. This could come in the form of asking them to put together a training presentation on a topic they are interested in or more advanced than others in. It could be asking an employee to research alternatives or options for a to-be-addressed issue and share what their recommendations are.

Meet People Where They Are

Creating opportunities as noted in the previous section is highly important, but so too is recognizing that some employees may be exactly where they want to be and are not looking to be stretched or developed further at all times. Leaders need to directly seek feedback from individuals periodically to determine where they are at, where they want to be, and how the leader can best help them. As circumstances both inside and outside of the workplace change, so too do individual goals and aspirations. CFO explores this via The People Analyzer by EOS, which places focus on the present and future objectives and how the organization can help an individual achieve them.

Genuinely Seek and Embrace Employee Feedback

Asking for feedback, whether via 1:1 interaction, employee satisfaction surveys, or other channels, is vital for sustained success. However, if feedback is solicited but dismissed without action or explanation for inaction, it can severely erode trust. Leaders should demonstrate how seriously they take and how appreciative they are of employee feedback by following up with definitive actions where they are warranted and, conversely, communicating the “why” when actions may not be taken in other circumstances. Above all, employees want to feel valued and want to be heard when frustrations mount or when ideas for improvement surface. Responding insufficiently and acting with disinterest degrades employee engagement and satisfaction.

Take Time for Self-Assessment

As we noted at the outset of this post, in-the-moment issues and emails at the top of the inbox have a knack for getting in the way of bigger picture assessment and exploration from leaders in terms of how they are prioritizing people in their organization. Effective leaders are deliberate about making the time for this type of exploration and acting on it to maximize employee satisfaction and contributions and create engagement.

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Given the importance of knowledge sharing in organizations, below are four recommendations that leaders should consider implementing to increase knowledge sharing and enhance performance within teams:

1. Foster A Creative, Diverse, and Trusting Environment:

Trust in another team member is directly related to the quality of the information people are willing to share. Team leaders who lead by example and demonstrate that the open sharing of ideas and information is valuable for the team are more likely to achieve the goal of promoting knowledge sharing throughout their organizations. Creativity requires a more open and diverse environment to flourish. Invest in building a diverse team to enrich the possibilities of new points of view and insights coming from knowledge sharing.

2. Non-hierarchical decision making:

By adopting a participative decision-making style, a team leader provides more opportunities for members to share their ideas. When team members have space to give input it is more likely that they will influence decision making and thereby experience the importance of knowledge sharing. It is also likely that a better decision will result from the collective knowledge of the group, based on a more diverse collection of points of view than the one possessed by the team leader alone.

3. Be Clear about your Values and expectations:

When individuals have clarity about the company’s vision, mission, and values, it is easier for them to understand how and why they can collaborate with new ideas and share insights that will help the organization move forward and continually progress. Ensuring that knowledge will be used for the greater good of the team decreases knowledge hoarding and facilitates trust by agreeing to put the collective interest of the team first.

4. Meritocracy:

Individuals are motivated to share their unique knowledge with one another when their leader treats them fairly and recognizes their input as valuable. Knowledge sharing will increase when team leaders recognize individuals for their contribution of ideas and information.

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If you’re recruiting like we are you’ll quickly notice that competition for the best talent is fierce and candidates now have so many options that organizations need to get creative.

Consider these three practices that will help you change your company culture and prevent the people you hire from wanting to update their CVs six months later.

1. Look for potential, not experience.

Yes, you read that right, potential over experience. Traditionally, hiring based on technical skills and critical thinking were the criteria, but in a complex and ever-changing business environment where culture, community, and people skills are so important, it’s too risky to rely solely on technical skills.

Instead, find the potential in a candidate that you can develop, train, and prepare for the eventual succession of your business. Identify talent that can adapt to new challenges and evolve into new roles as your business takes unexpected turns in its growth.

Avoid hiring “rock stars” as they know they’re worth it and may look for another job before the integration process is over!

Instead, nurture your own talents. As you develop them and they become internal rock stars, your challenge now will be to create the environment that pushes them forward and upwards.

2.  Seek diversity as a driver of your corporate culture

Great leaders cannot succeed alone. Even the most confident and charismatic leaders need to surround themselves with quality support and advice

Make sure you recruit diverse talent from different backgrounds with different personality types, strengths, and gifts to bring you new perspectives! They will be able to advise you when necessary and discuss ideas that will drive your team forward.

3. Create an environment that attracts top talent

Candidates are looking for a purpose in their work and the opportunity to make a real difference:

• They want to know that they will have career and learning opportunities to develop.
• They want to know that they will be part of a community with shared values. The question on their minds is: “Will my environment be supportive, flexible, fun and engaging?
• They want to know that their potential employer is open-minded. This means that it is safe to challenge the status quo, share ideas and give your opinion, because leadership does not lead by dictatorship.
• They want to know that their future bosses will congratulate them, recognize and reward them for a job well done

Be sure to assess, with your recruitment team, the qualities, strengths, and behavioral traits you want in your future employees. Do these traits match your cultural values that will drive your business forward? If the answer is no, consider revising your interview questions so that you can find the perfect fit.

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Which is more important in promoting collaboration: a clearly defined approach to achieving the goal, or clearly specified roles for individual team members? The common belief is that it’s essential to define the approach carefully while leaving the roles of individuals within the team open and flexible, which will encourage people to share ideas and contribute in multiple ways.

In fact, the opposite is true!

Here are the benefits seen in collaborative teams when the roles of each team member are clearly defined and understood:

1. Each team member knows what they contribute to the project by using their individual skillset. When you clearly define roles and responsibilities, especially formal roles, everyone gains an understanding of what is expected of them in the group. They know how to operate, what they are expected to do and how to achieve the group’s objectives.
2. When time is short,  smaller elements in a project can start to fall on the sidelines. This is especially true if no one knows exactly who is responsible for carrying out these tasks. The less desirable tasks are often left undone because no one wants to do them. In contrast, when people understand their job responsibilities, nothing is left out of the process.
3. People work better together when they understand their roles. There are fewer positional struggles, fewer misunderstandings, a willingness to contribute and greater overall creativity when everyone understands their responsibility within the team.
4. Less energy is wasted. Whenever there is a lack of clarity, people waste energy on things that don’t matter. They debate about things that are not as important, fail to focus on things that are and miss opportunities. Define roles and responsibilities, and much of this energy becomes available for other purposes which is always the ideal scenario to respect those project deadlines.

Summed up, defining roles and responsibilities not only helps to find the right person for the job but also improves an employee’s experience and job satisfaction. Ultimately, this promotes the efficiency and productivity of your organization.

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So what did we do to promote team building and how did we make it fun? 

Almost nothing! Although putting your team through long discussions and activities can be beneficial in some cases, it doesn’t always create an organic relationship amongst employees. 

One activity we did was a fun “selfie scavenger hunt”, where each team member had to pair up and take selfies with a variety of different objects from a list we created. In addition, our CEO Alex gave a short presentation on Virtual CFO’s current plan and future goals. Aside from these few planned events, we let our employees enjoy a beautiful summer day on a piece of gorgeous waterfront property in Metchosin. 

We believe that, because we are virtual, it’s refreshing and important to spend time and connect with our team in person in order to build ourselves into the company we want to be and accomplish our goals.

So what is our mission and what values do we stand for? 

Our mission is fixed in providing strategic financial guidance and tech solutions, propelling startups into scale-up. We provide a progressive external finance team for startups and small businesses looking to accelerate their growth.

Our Values

Passion for startups 

Since we are a growing company ourselves, we get the startup life. We intrinsically understand the needs of the fast-growing companies we work with, and we strive to help them by providing valuable financial information to key stakeholders.

Respect for people 

Businesses are built from great people, and we respect and value the people we get to work with to reach our goals and experience success together.

Innovation

We constantly search for new solutions and ideas to help our clients and employees succeed in an innovative and technology-driven world.

Team focused

We choose to be highly collaborative and team-focused both within our internal team and the companies we work with.

Do you have questions for our team? Contact us

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