7 Keys to a Successful AP Automation Solution for your business
Did you know that accounts payable bottlenecks cause cash flow issues for 60% of businesses? Businesses must maintain accounts payable properly to ensure business continuity and maximize growth potential. Furthermore, they must maintain good relationships with their vendors and customers. Most businesses admitted that inefficient AP processes had caused suppliers to refuse to work with them again.
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What is Accounts Payable Software?
Accounts payable (AP) software automates business payment processes from start to finish by leveraging customized instructions for each business process. The software filters, categorizes, matches, and validates critical accounting data before pushing it through the accounting system to be recorded.
Accounts payable teams use accounts payable software to process, record, and pay discounted vendor invoices. AP software solutions also include enterprise resource planning (ERP) systems.
1. Simplify accounting processes
One of the most effective ways to improve accounts payable processes is to simplify them.
Before preparing for check runs, ensure that your accounting team has the invoice backup ready and that the appropriate authorities have approved it. Before you, as a business owner, support them, these approvals should be in place.
Ensure that your A/P team knows each check run's maximum cash disbursement limit. This information assists businesses in paying the highest priority invoices first. Delegate some decisions to your staff so that you are only partially controlled. Allow them, for example, to pay off large balances in installments or to postpone payments to suppliers with a higher tolerance.
2. Maintain a close eye on all past-due payments
To improve cash flow, business owners must understand how much they owe, whom they owe it to, and when they must pay it. This data can also create better budgets and make more informed business decisions. This stage is easier to complete if you use efficient accounting or expense management software.
If you have a lot of regular, recurring payments, you can automate or set up reminders to make your life easier. In the long run, automated recurring payments will reduce your stress and distractions. However, make sure to review your costs at regular intervals to avoid overpaying or paying for services you no longer use.
3. Pay Invoices in Big Batches
It is one of the most crucial accounts payable best practices. Even though you should log every expense as soon as it occurs, there may be better strategies than paying every invoice as it arrives. If you pay your vendors five times per week, your weekly work is multiplied by five.
Consider how much time you waste each week logging invoices, creating payment batches, checking each invoice, approving it, and processing payments! Limiting the payment cycle to twice a week can cut your workload by 60%!
4. Use Technology to Assist Your Employees
Creates automated A/P modules to ensure smoother payment transactions. Handling time-consuming, repetitive tasks in the A/P function has become easier as technology advances. Technology aids in automating such tasks because It reduces simple errors such as paying the incorrect amount against an invoice or entering the wrong check number.
A/P transactions use well-designed and high-quality software. It ensures that your automated accounting software includes vendor-specific terms. Process reports regularly to anticipate what will come up in the coming days. It uses laser-printed checks to upgrade your accounting system and recognizes paid and unpaid bills.
5. Try to go Paperless
Another best practice for accounts payable is to go paperless. Handling electronic bills simplify the entire A/P process. You no longer have to wait for physical paper bills to be mailed to you. You will also significantly reduce the risk of damaging or losing your paper invoices. Furthermore, With AP software, you can eliminate any risks associated with a late payment due to these damages.
Unsurprisingly, 52% of A/P departments want to stop paper-based processes. Some vendors even provide electronic invoices to reduce paper use and increase efficiency. Even if your suppliers are more traditional, you can always persuade them to go paperless by providing contact information.
Another advantage of an e-invoice is that it is simple to import.
6. Be ready to commit internal resources to the project
Select an AP software like Hermes- AP automation! Invest in both the project's time and its infrastructure. You can commit to your deadlines without hassle. Both your stakeholders and your partners require time for a successful implementation.
7. Choose the right partner
There is no "one size fits all" solution for AP Automation. Every business has its Accounts Payable process. Choose your partner carefully, ensuring they have the skills and solutions to meet your business objectives, and work with them as a partner to ensure a successful implementation.
Over the years, Hermes- AP automation has built extensive and become the best-automated invoice processing software with clientele across industry verticals. We have successfully delivered customized Accounts Payable outsourcing services suited to your business requirements. When you outsource Accounts Payable to Hermes- AP automation, you can control your expenditure patterns and demand special privileges from vendors through price or volume discounts. Outsourcing your Accounts Payable management requirement to Hermes- AP automation will help you to avoid paying fines or interest for late bill payments. Want to know more about how your company can get started on an Accounts Payable Automation journey?