Accounts Payable Systems That Improve Efficiency
You might think your company runs on its sales figures or on its customer service desk, but the truth is that your business cannot survive if your accounts payable is a mess. If your business cannot keep proper track of the money it owes to its vendors, suppliers and other creditors, it will be a challenge to bring in enough money to stay in the black. Unfortunately, because AP is so complex, it is more than likely that your accounts payable is operating inefficiently in one way or another, meaning you might never have up-to-date information about what money you owe and to whom.
Fortunately, there are systems to improve the efficiency of AP. A few AP systems you might need to implement within your organization include:
Humans are prone to errors, especially when working with numbers. Even the most acclaimed accountant in the world is apt to make a mistake at some point in their career, and that mistake could cost their employer an incredible amount of money.
Thus, more and more organizations are opting for AP automation. Automation tools streamline accounts payable processes by eliminating some of the most tiresome tasks and keeping human interaction to a minimum. The result is a more intuitive system that offers excellent visibility without the risk of dangerous and expensive errors. Because of its efficiency, automated AP systems tend to save companies money over traditional, human-driven AP processes.
Because automation of accounts payable is so popular, you have many solutions to choose from. As you research AP automation, you should consider the types of invoices and processing scenarios that your company manages. Then, you should look for programs that are equipped to meet your unique needs, which will ensure more complete automation of AP tasks.
Cloud computing has been popular for decades, and it is more than likely that your company utilizes the cloud for many different services. Now, it is time for you to migrate your accounts payable to the cloud.
If you are unfamiliar, the cloud is a term that refers to a method of computing in which software and services run over the internet rather than locally on your own office devices. The benefits of the cloud include accessibility and efficiency. When you save information to your company’s cloud, authorized employees can access that information whenever and wherever they please, which makes remote work possible and productive. The cloud also reduces the demand for large amounts of on-site digital storage space, which can make office space more affordable for startups and small businesses.
Cloud-based accounts payable solutions generally function as Software-as-a-Service (SaaS), meaning you do not need to download an AP program onto every computer in your company. Thus, you can take advantage of more robust AP software and give your accountants more freedom to manage AP when and where they can.
There is a general AP process cycle that many accounting departments adhere closely to. This usually includes receiving vendor invoices, verifying the accuracy of those invoices, correcting any variances, approving the invoices, issuing payments and marking invoices as paid. Different employees can add or subtract processes as befits their own workflow and understanding, and over time, as employees come and go, unnecessary processes can compound inefficiencies within the system and slow down the AP cycle.
Thus, you and your AP team must regularly undergo process management to weed out the accounts payable processes that do not contribute to greater efficiency or success. When executed properly, process management should streamline processes, which will increase the productivity of your teams, minimize risks and reduce costs. Automation can be an essential component of process management, but because humans will always be involved in AP, you should schedule process reviews on a regular basis to keep everyone’s workflows seamless.
Accounts payable is an essential business area that cannot be eliminated, so you might as well invest in services and systems that will make AP as efficient as possible. With automation, the cloud and process management, you should be able to maintain an accounts payable department that ticks like a Swiss watch.
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