How Outsourced Accounts Payable Services Make You More Efficient

Almost all accounting firm owners, especially the small and medium ones, have one thing in common - the “I will just do it myself” mentality. While sometimes it can work in your favor, other times it won’t.

With your business growing, responsibilities are bound to increase. And this mentality can pull you back; you have too much on your plate, with too little time. You are overwhelmed. There are more errors, clients are unhappy, and you end up second-guessing each of the decisions you made.

You need to optimize your operations, making them efficient and cost-effective. This also includes your accounts payable (AP) processes.

Outsourced accounts payable services can play an important role in making your processes easy and seamless. Many firms—small, medium, and large—have made their operations more efficient and cost-effective by seeking support from accounts payable outsourcing professionals.

Signs that you need to outsource your accounts payable

1. Your internal team is overwhelmed with the workload

Accounts payable is a critical business process that helps ensure that all your associates are paid on time. However, it can take up a significant amount of your team’s time, leading to AP departments feeling overwhelmed and lost. This is especially valid for firms that are growing fast and have several clients, causing invoices to pile up.  While this is great for your sales, there is a lot of pressure on the AP staff. If you have paper-based processes, the volume of manual data entry involved can make things even worse.

2. You have a high invoice-processing costs

Processing invoices is a time-consuming and costly affair. When conducted manually, the cost of processing an invoice can go up to $30 to $40. If you have an inefficient workflow, there can be a misuse of valuable time and resources. Dealing with uncooperative vendors, and back-and-forth communications between departments to verify your invoices can be hectic. The costs can add up too quickly, causing a financial strain on your organization. If you carefully explore your options to reduce this cost for invoice processing, outsourcing can seem a practical solution.

3. Your processes lack control

Errors in your AP reports are common if you have a manual process, causing numerous problems. Incorrect data entry and duplicate payments can cost your business a lot of money. It also disables your ability to look into your financial future. Depending on the size of your business, the number of duplicate invoices also soars high. This equals to hundreds, thousands, or millions of dollars lost in duplicate payments when controls are not in place. Additionally, missed or late payments can also cost your resources time when they have to constantly end up recovering the incorrect spending, leading to poor productivity.

4. You have poor relationships with your vendors

Just like the relationships with your customers, the relationships with the vendors are important. If they find it difficult to work with your organization, vendors can take a step back. Missed due dates, non-payments, or simply poor communication, vendors can constantly pressure your AP teams, leading to a loss of valuable time. These gaps can sometimes compel vendors to send the same invoice through multiple mediums, leading to double-paying of an invoice.

How can accounts payable outsourcing services make your firm more efficient?

1. Secure invoice processing

Thanks to the growing technology, the world is now more connected than ever. But it has also heightened the complexities of sending payments to vendors because of the security risks, especially for small and medium organizations that lack proper security protocols and dedicated security teams. With accounts payable outsourcing services, a team of professionals helps bridge this gap by offering sophisticated security measures and cutting-edge technology for accounts payable processes. This can effectively reduce the chances of falling victim to payment fraud or other security breaches, and helps teams save time and money lost on operational failures.

2. Reduce the risk of errors

Errors in accounting payable can lead to a significant rise in costs and compliance issues for businesses. A lot of these errors happen due to manual data entry and a lack of control over Purchase order requisitions, approvals, and deliveries. By partnering with accounts payable outsourcing professionals, businesses can benefit from the integration of advanced technologies, systems, and processes. These solutions are designed to identify, eliminate, and mitigate errors before they blow out of proportion while ensuring an error-free end-to-end process.

3. Improve turnaround times

Time is of the essence for every business. However, accounts payable can take up significant amounts of time, often disrupting productivity and efficiency. By partnering with accounts payable outsourcing firms, you get access to cutting-edge technology and automation tools that can help save time on all accounts payable-related processes. This partnership helps streamline the processes in a fast and accurate accounting system. This also helps improve operational efficiency, allowing focus on core business processes.

4. Properly utilize resources and automation

By choosing accounts payable outsourcing services, you benefit from the team of professionals and automation tools that are readily available at your disposal. These comprehensive solutions include software like project management tools, document management, and robust reporting tools. Accounts Payable automation is seamlessly integrated into this package, helping unlock significant value across all processes.

Steps to implement outsourced accounts payable reporting

• Assess current processes to identify gaps
• Migrate data to the new systems, ensuring the outsourcing team has the required information and training
• Work with the partner to monitor performance and improve on your processes

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