The Accounts Payable (AP) department is fundamental to a business’s operational efficiency and financial success – but how to manage accounts payable effectively?
This question becomes significantly more important for companies or organizations that process more than 250 AP invoices per month (3,000 invoices per year).
Once a business or organization reaches that level of invoice processing, organically grown manual processes start to break down. Invoice management gets out of control leading to operational inefficiencies and late fees. Worse, invoices can get lost and payments get missed altogether.
And companies or organizations that fail to make AP efficient are wasting tens of thousands of dollars.
The good news? No matter what your volume of invoice processing is, a business can achieve significant permanent cost savings and ROI by managing accounts payable effectively.
You can be an AP hero by implementing AP best practices including AP automation.
Quick Review of the Invoice Processing Steps
We dive into each of of the invoice processing steps in this article.
But to review, these are the general steps to invoice processing:
- Receive Invoice
- Copy of Invoice is Filed
- Invoice is Approved
- Invoice is Paid
Manage Accounts Payable Effectively Through AP Automation
Performing each of these AP processes is time consuming for many organizations. This is especially true if any of them are being performed manually.
So the first step in managing accounts payable effectively is automating as much of your AP process as possible.
Large companies have been able to afford the high costs of setting up invoice process automation for some time.
But, until now, AP automation solutions were out of reach of small to medium sized organizations. Upfront costs including OCR software and hardware were too high. The solutions too complex. And high ongoing licensing fees made an unappealing AP automation ROI case for smaller companies.
AP Automation for Small Business and Medium Sized Companies
But now there is A/P One.
A/P One is a cloud-based software as a service (SAAS) solution. Specifically designed for smaller businesses and organizations that process under 15,000 invoices per year (1250 invoices per month), but it can handle higher volumes too.
With A/P One, you or your vendors upload or email invoices to our cloud-based solution using an email address specific to your organization. No expensive OCR technology to buy and manage!
The invoice appears in your clerk’s A/P One work queue within 1 business day. Important data is already entered in your system ready to be processed.
And unlike OCR data capture, CoreIntegrator Data Capture Service provides near-100% data accuracy. Click here to see how.
Your organization will see immediate time and cost savings with a free trial of A/P One.
After your free trial ends, our unique flat-rate pricing model means you’ll never pay more than a couple dollars per invoice processed.
And that cost goes down as the volume of invoices goes up.
Your monthly cost is based on the number of invoices your business processes. No hidden costs or surprises!
That’s an amazing deal considering that manually processing a SINGLE invoice can cost a company anywhere from $14 to $20 in hard and soft costs.
Manage Accounts Payable Effectively by Implementing Best AP Practices
To increase AP department efficiency, leading organizations implement automation tools following accounts payable automation best practices.
Here are the Best Practices for AP Automation in 2020:
- Verified AP Data Capture Service has Replaced Optical Character Recognition (OCR) as an AP Automation Best Practice
- Robotic Process Automation (RPA) Technology is Here to Stay
- Combine Verified AP Data Capture with RPA for Fully Automated Accounts Payable Processing
- 2020: The Year Work From Home Became a Requirement
- Understand the Invoice Processing Steps Before Automating Them
- Know the Difference Between Cost Savings and ROI
- Maximize AP Automation ROI in 2020
- Best Practices in Choosing an Accounts Payable Software Provider
Adopting these best practices will help reduce departmental costs and drive revenue throughout the organization.
Just How Efficient and Effective Can Your AP Department Be?
AP automation technology and best practices enable AP departments to sustain and even contribute to a strong bottom line.
Implementing AP automation software and best practices are an investment, not an expense. Because AP automation and best practices allow your AP staff to do more with less.
But more importantly, implementing AP automation and best practices can make your existing staff so efficient that they can spend their time on strategic procure to pay activities.
When your AP specialists and AP clerks are no longer spending a bulk of their time manually entering invoice data they are freed to take on new duties and responsibilities. They can add value to your organization without adding any expense.
Imagine your AP staff spending all their time on activities like data analysis, vendor relations and other strategic initiatives.
For example, your AP staff can spend time identifying trends in AP. They can examine vendor pricing trends to see where cost savings might be available. And they can look for anomalies in pricing across different divisions or locations of your organization from the same vendor.
At the same time, your AP staff will be freed to spend time on vendor relations. Since your AP department will be so efficient you’ll be able to pay invoices incredibly quickly. So why not have your AP staff spend the time they used to waste on manual data entry contacting vendors to inquire about the possibility of early payment discounts? Or shopping for less expensive vendors?
The possibilities are endless.
Bottom Line – How to Manage Accounts Payable Effectively
Managing AP effectively is all about automation and best practices.
Best accounts payable practices apply across all business and organization. Accounting department leaders should implement them ASAP.
Meanwhile, most accounting managers who have never seen a truly efficient and effective AP department don’t realize what a difference AP automation will make until they they try it out.
And accounting department leaders who implement AP automation will wonder how they ever got along without it.