3. Purchase Orders are getting stuck in never ending holding patterns
All PO’s need approval at various levels of the business. This is a vital step in the purchase process that prevents rogue spending and fraud, but all too often the burden for securing approval falls to the accounts team.
Chasing, enforcing and rectifying spending limits, duplicate POs, and PO-invoice matching all puts pressure on the accounting team. Policies around PO’s are recorded in Word or PDF documents, leaving the company to depend on approvers, the accounting team, and the CFO to manually enforce purchasing policies. The end result is that POs often end up in a holding pattern while awaiting approval.
To see if this is happening in your accounts payable department, assess the average length of time and the number of people each PO goes through for approval. If this takes days or weeks, it’s a symptom of ineffective processes.