When it comes to the financial success of your business, Accounts Payable (AP) is one area that should not be overlooked. AP management is critical to your company’s success and can have a big impact on your bottom line. In this blog post, we will discuss some of the key benefits of strategic accounts payable management, and how it can help your business grow and prosper.
One of the biggest benefits of AP management is improved vendor relations. When you make timely payments to your vendors, they are more likely to continue doing business with you and may even offer better payment terms or discounts in the future. In addition, paying invoices on time can help you avoid late payment fees, which can add up quickly and eat into your profits.
So, how do you go about implementing a strategic AP management plan? First, you need to understand what your company’s specific needs are. What are your payment terms? How much can you afford to pay upfront? What discounts are available? Once you have a good understanding of your company’s Accounts Payable needs, you can start to develop a plan that will work for you.
How To Streamline Accounts Payable Processes
There are a number of ways to streamline your Accounts Payable processes and make them more efficient. One way is to automate as much of the process as possible. This can be done by using software that allows you to input invoices and track payments. This can save you a lot of time and hassle and can help to ensure that payments are made on time.
Another way to streamline your Accounts Payable process is to outsource it to a third party. This can be a great option if you don’t have the time or resources to manage it internally. When outsourcing, be sure to choose a reputable and experienced provider who can offer you a wide range of services, including invoice processing, payment management, and reporting.
No matter how you choose to manage your Accounts Payable process, the important thing is that you take a strategic approach and make it a priority for your business. Doing so will pay off in the long run, in terms of improved vendor relations, increased profits, and a more efficient and streamlined operation.
Strategies for Improving Your Accounts Payable Processes
Here are three ways to improve your Accounts Payable processes:
Standardize Your AP Processes
The first step to improving your Accounts Payable processes is to standardize them. This means creating a set of procedures and guidelines that all employees must follow. This will help to ensure that everyone is on the same page and that invoices are processed in a consistent manner.
Invoices that arrive should be prioritized and organized by their due date. An accounts aging report can help manage those due dates, with labels such as “current” and “past due 1-30 days.” This allows you to stay on top of bills and procure new items while maintaining good relationships with suppliers.
When it comes to standardization, strive for simplicity. Knowing that the time you invest in this process will not only ensure that suppliers are paid on schedule, but will also free up valuable accounting staff time, department managers, and the CFO’s time is critical.
Accept Electronic Invoices
Another way to improve your Accounts Payable process is to start accepting electronic invoices. This will save you time and money, as you won’t have to print and mail out invoices. In addition, it will allow you to track payments and keep better records.
Receiving and paying bills electronically allows businesses to save money and time while allowing employees to focus on more essential duties, according to one study.
Electronic invoices save time by reducing the number of “touches” needed, eliminating errors, and ensuring suppliers are paid promptly.
As we mentioned earlier, one way to improve your Accounts Payable process is to automate as much of it as possible. This can be done with software that allows you to input invoices and track payments. Automating your AP process can save you time and money, and can help to ensure that payments are made on time.
Automated accounting software can take on payments and other AP processes, making the workload lighter for the accounting department. By transitioning to an automated system, companies:
- Save time by reducing the number of “touches” needed
- Eliminate errors
- Ensure suppliers are paid promptly
- Record is organize
When you automate manual processes that use paper, spreadsheets, and disconnected systems, your business becomes more productive and efficient. You’ll also save money, give employees opportunities to do work that is more gratifying, and reduce the likelihood of errors or fraud.
Is AP Automation Right For Your Business?
Now that you know more about what accounts payable is and how to improve your processes, you may be wondering if AP automation is right for your business. The answer depends on a number of factors, including the size of your business and the number of invoices you process each month.
If you’re still processing invoices manually, you may want to consider automation. It can save you time and money and can help to ensure that payments are made on time. In addition, it can give you more visibility into your AP process and allow you to track payments.
If you’re not sure whether AP automation is right for you, we suggest talking to a professional who can evaluate your specific needs and make a recommendation.
Let us know if you have any questions about Accounts Payable or AP automation. We’re here to help!