Your accounts payable department is one of the most important back office teams.
These teams make sure that only legitimate bills and invoices get paid accurately and on time.
But what does an optimized accounts payable department look like? And how can you create one?
Read on!
Table of contents
- Tip #1 – Reduce the Size of your Accounts Payable Department with Automation
- Tip #2 – Use Automated Data Capture to Eliminate your Accounts Payable Department’s Data Entry
- Tip #3 – Automate Purchase Order Creation and Matching
- Tip #4 – Implement AP Best Practices
- Tip #5 – Save Money Paying Invoices – Turn Your AP Department into a Profit Center!
- To Wrap Up…
Tip #1 – Reduce the Size of your Accounts Payable Department with Automation
Hiring an accounts payable team member is an arduous process. Often it includes paying a recruiter. And no one wants to add permanent overhead to their business unless absolutely necessary.
So as you analyze ways to reduce staff overhead costs carefully consider implementing AP automation.
AP automation that manages your invoices will make your AP department up to 500 times more efficient.
Also, AP automation makes your AP department scalable without adding additional overhead.
We have customers who implement our AP automation solutions and then double or even triple the number of invoices they process without adding staff.
In fact, their accounts payable departments become so efficient that they have their AP staff spend the time they used to waste on data entry contacting vendors to inquire about the possibility of early payment discounts. Or shopping for less expensive vendors.
Businesses with paper or ad-hoc AP processes must add headcount to keep up with a growing volume of invoices.
But optimized accounts payable departments are mostly unaffected by growth. And their businesses are able to reallocate staff to other areas of the company that benefit from additional resources.
Tip #2 – Use Automated Data Capture to Eliminate your Accounts Payable Department’s Data Entry
Manual invoice data entry is the most time-consuming, tedious, and soul-sucking task that an accounts payable department performs. And it’s incredibly prone to mistakes.
So, optimized accounts payable teams use AP Automation (Accounts Payable Automation) to digitize and streamline the processing of purchase orders and invoices. All the way from procure to pay.
AP Automation solutions use advanced optical character recognition (OCR) technologies integrated with robotic process automation (RPA) software to automate accounts payable PO, invoice, and payment processes.
The best AP automation solutions also use Verified Data Capture Services to achieve 99.9% accuracy of AP data automation.
Tip #3 – Automate Purchase Order Creation and Matching
Creating purchase orders is meticulous and often repetitive work.
And then 3 way match of invoices with receipts and invoices is mind-numbing and fraught with errors.
So, automate them both!
Automated procure to pay systems include templates and autofill to ease the burden of PO creation.
And then when items or services are delivered, systems can automatically match the delivered item or service’s invoice and/or receipt.
There are two ways to achieve this automated reciept:
- Frist, using OCR technology, the system identifies a SKU or product/service name and matches that across the three PO documents. Click or tap here to learn more about this automated 3 way match.
- Alternatively, using advanced algorithms, the system calculates which items or services on each PO line item have been delivered to automatically match the three PO documents. Click or tap here to learn more about this automated 3 way match.
But the very best systems utilize BOTH of these approaches to automated 3 way match. It’s the best way to fully optimize automated three way match.
Tip #4 – Implement AP Best Practices
Optimized accounts payable teams implement AP best practices.
These include:
- Streamlining purchasing.
- Reducing the cost of processing invoices.
- Implementing verified data capture.
- Automating 2-way and 3-way invoice matching.
- Following an AP internal controls checklist to prevent invoice fraud.
- Adopting digital invoice approval workflows (invoice approving managers love invoice approval software!).
- Digitizing travel and expense tracking and approval.
- Qualifying for early payment discounts.
- Establishing an AP disaster recovery plan.
In short, each of these best practices will improve your accounts payable department. Moreover, all these done together, will help you create a truly optimized accounts payable team.
Click here to contact us and we’ll help you implement them all!
Tip #5 – Save Money Paying Invoices – Turn Your AP Department into a Profit Center!
In today’s digital world your company can choose from a variety of electronic payment automation platforms and election payment services.
That said, when it comes to business-to-business electronic payments there are several options available including ePayment by check, ePayment by ACH, ePayment by wire transfer, and ePayment by virtual credit card.
With CoreIntegrator Payment Automation you can pay using any combination of these payment automation services.
Subsequently, using CoreIntegrator’s AP automation solutions, all of these ePayment options can be seamlessly integrated into your AP automation solution and any accounting or ERP system regardless of system limitations.
Above all, with the advent of virtual card payments, you can actually monetize bill payments!
Did you know: vCards allow you to turn AP processing into a profit center.
V-Cards are tied to a specific vendor and invoice or set of invoices and dollar amounts. Once generated they can only be used once and the card number immediately becomes invalid. As a result, this provides your business account an extra level of security and fraud protection.
In short, using virtual credit cards your company will earn cash rebates for each transaction contributing real dollars to the bottom line.
To Wrap Up…
Optimizing your accounts payable department is not rocket science. It’s simply the application of automation and best practices.
In conclusion, we’ve been helping companies just like yours make your accounts payable team more productive for over 20 years. Therefore, why not let us show you how we can do the same for you?