Accounts payable workflow automation seeks to take manual processes, examine why they cause delays, and streamline them through better technology and proven procedures.
Here are some ways businesses can improve how they process, record, and make payments:
Use Better Technology
Most modern accounting software contains accounts payable (AP) functions that integrate seamlessly with budgeting, purchase orders, and general ledgers. Accounting software replaces manual functions like filing, managing, and reviewing invoices, and it’s a critical first step to making payments easier.
Standardize the Process
A standard system for managing invoices means fewer invoices fall through the cracks and everything gets paid on time. AP aging reports list payables from current to over 90 days past due to prioritize payments and keep late payments top of mind so they can be addressed as soon as possible.
How you pay invoices is as important as when you pay them. If your company is unable to pay an invoice by a due date, be open about it and work with your vendors to address the debt. Better relationships help you get better deals and discounts and, depending on your business, can lead to new sales.
Every business has bills to pay, and every business has a vastly different procedure to pay them. Some companies wait until the last minute to make payments, and others require invoices to be approved by management before they are paid. Some companies have a centralized AP department, and others rely on each business unit to pay invoices.
Regardless of the setup, traditional AP workflows begin with a vendor sending an invoice via email or mail. Once the invoice is received, it starts a multistep, manual process fraught with bottlenecks and potential issues that can delay payments. This is why most modern companies use automation and proven processes to streamline how they pay invoices.
Accounts payable processes should contain adequate internal management controls to prevent:
- Paying fraudulent invoices
- Paying incorrect invoices
- Paying invoices that lack approval from management
- Paying a vendor twice
- Losing an invoice and neglecting to pay a vendor
- Incorrect reporting that either overstates or understates an expense or incorrectly affects a liability
Our consulting services help you examine your payments process, how it fits into your cash flow, and why it is an important function of your business. We combine financial consulting with tax advisory services and audit assurance services to provide complete financial management solutions for our clients. If you have trouble paying invoices on time, if your vendors are frustrated by complex existing payables processes, or if you frequently misstate expenses and liabilities, call us today. There is always a better solution.