Billing staff can improve the accounts payable process and grow business with these key steps.
Do you know on any given day how much you owe vendors for goods and services? Is your business getting the most out of early payment discounts?
Being able to say yes to these questions, and having a smooth and effective accounts payable process within your practice are crucial for its success and growth.
Unfortunately, this process can also feel frustrating and be incredibly overwhelming for billing staff. As you now, accounts payable processes encompass far more than just tracking invoices.
4 Steps To Run a Financially Sound Business
There are some key elements that will help run a financially sound business, and we’ve broken them down into four steps.
1st Step: Automate Invoices
The accounts payable process begins as soon as you receive an invoice from a vendor for goods or services rendered. This invoice will include the details regarding the agreed payment.
Sounds simple, right? But here’s your first challenge: vendors don’t all use the same type of billing documentation.
They might be sent electronically, by paper, in different digital formats, or even by email or fax. In fact, some of the most popular invoice resources recommend a variety of types for your business. You can try to convince your vendors to use the same invoice format, but the specific information each one needs for their personal records will vary.
Your AP department is required to manually verify the invoice information and maintain each for financial records. This is where automation can be helpful, because invoices can then be tracked electronically through a system that catalogs and categorizes information from any invoice format.
2nd Step: Get Invoices Approved Quicker
Once your financial department has sorted through the potentially confusing assortment of invoice documents, the next step is to get the invoice approved.
Unfortunately, if the invoice is missing information or has errors, your company may need to send it back for corrections. Approving a paper invoice is often a waste of time, because the document has to be physically signed and routed throughout the department.
If your invoices are digital, you can implement an AP workflow automation tool to make routing easier and far more efficient. Digital solutions offer your employees a way to quickly route information, communicate with vendors, and pay service providers, which is one of the many ways you can save money with automation.
3. Eliminate Paper Copies
Paper invoices can get lost, damaged or forgotten. They also take up space.
Eliminate filed paper copies in your AP department by using software to capture data and documents like invoices, PO’s and check requests.
Comprehensive automation tools can also capture the data from the line item detail/remittance portion of the invoice and upload the information directly into a tracking system.
Since many solutions are cloud-based, that data is available immediately. Even better, finding information about past invoices or vendor services is simplified using this method.
To find out more about how much the manual AP process is costing you, see How to Sell Automated Supplier Payments to Your Boss.
4th Step: Invest in AP Automation Software
Save money and time by adopting an electronic AP automation solution. Accounts payable business process outsourcing brings with it enormous benefits, including:
- Reduced risk of errors
- Reduced labor costs of invoice processing
- Regularly updated financial reports and audit information
- Early payment discounts
- Optimized working capital
- Controlled funds in real-time
To find out more about the benefits of electronic payments and AP automation in 5 Metrics That Excite CFOs About Electronic Payments.
AP Processes: Final Thoughts
Accounts payable processes span the entire life of an invoice payment, and includes everything from receiving and cataloging different invoice formats, to verifying data and submitting it for approval and meticulously tracking financial data. Maintaining immaculate financial records is important in keeping your business running smoothly and your vendors happy.
Everything that goes into AP can seem complicated and even paralyzing, but taking these steps will help your department stay on track.