Industries that struggle most with AP

6 June, 2023

Posted by

Elise Loterman

By Elise Loterman – Partner Manager at EzzyBills.

Do you work in one of these industries? If so, EzzyBills is for you.

Accounts payable (AP) is a critical function in any organization, and while the specific challenges may vary, there are certain industries that commonly struggle with AP processes.

Here are a few industries that often face difficulties in managing their accounts payable:

Manufacturing: The manufacturing industry typically deals with complex supply chains, involving numerous vendors and suppliers. This complexity can lead to challenges in reconciling invoices, tracking payments, and managing inventory. Inaccurate or delayed AP processes can impact production schedules, strain relationships with suppliers, and affect overall operational efficiency.

Retail: The retail industry operates on tight profit margins and often has a high volume of transactions with various suppliers and vendors. Managing AP effectively in retail can be challenging due to a large number of invoices, frequent price changes, seasonal demands, and handling returns or disputes. The need to accurately track inventory and manage cash flow adds to the complexity.

Construction: Construction projects involve multiple subcontractors, suppliers, and invoices from various sources. Keeping track of invoices, verifying the accuracy of billing, and managing payments within project timelines can be demanding. Construction projects also often require compliance with specific regulations and may involve retention payments, further complicating the AP process.

Healthcare: The healthcare industry deals with intricate billing systems, complex payment structures, and stringent compliance requirements. Healthcare organizations must handle a high volume of invoices from various sources, including medical suppliers, equipment vendors, and service providers. The need to navigate insurance claims, manage patient billing, and comply with regulatory guidelines can pose challenges for AP departments.

Hospitality: The hospitality industry, including hotels, resorts, and restaurants, faces unique AP challenges. These businesses often rely on a multitude of vendors for supplies, inventory, food, and beverages. Managing a wide range of invoices, ensuring accuracy in billing, handling vendor contracts, and managing payments can be intricate, especially considering the seasonal nature of the industry.

Transportation and Logistics: The transportation and logistics industry involve managing a complex network of suppliers, freight forwarders, carriers, and customs regulations. Handling invoices related to shipping, fuel, maintenance, and other logistics services can be challenging due to the large volume of transactions, the need for accuracy in freight billing, and coordination with multiple stakeholders.

While these industries often struggle with accounts payable, it’s important to note that each organization within these industries may face unique challenges based on their specific business models, size, and operational complexities. Implementing streamlined AP processes, leveraging technology and automation such as EzzyBills, and improving communication with vendors can help alleviate some of the difficulties faced in managing accounts payable.

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