Streamlining AR and AP Processes for CPAs With Outsourcing

Accounts receivable (AR) and accounts payable (AP) involve a lot of paperwork and back and forth. Sadly, this is not a one-time event; it takes up a significant amount of time from the CPAs’ daily schedule.

If you are an independent CPA, working solo or with a handful of teammates, this can be especially challenging. Chasing vendors and clients to ensure you get paid on time and have a steady cash flow or clearing your dues before you get payment reminders from your clients and vendors is a lot of work.

Ensuring seamless processes lies at the heart of ensuring the smooth functioning of your business. CPAs have to wear multiple hats, and adding accounts payable and receivable to your to-do list adds to the pressure.

The accounting community is fairly supportive of one another, and hence, CPAs should take the support available to ensure they have built a seamless process. But if you want to take your business to the next level, make your cash flow smooth, and outsource your AR and AP practices today.

Key challenges of accounts receivable and accounts payable CPAs face

The goal of the CPAs should be to make the accounts receivable and accounts payable processes seamless. This is the foundation of the smooth operation of the business. CPAs often let other aspects cloud the challenges that arise because of AR and AP gaps.

The main challenges they face include:

1. Time-consuming manual processes

The size of the CPA’s businesses is often smaller. Their operations require manual data entry, invoice reconciliation, and payment approvals. They are all labor-intensive, leaving little room for CPAs to focus on more strategic tasks such as financial planning and analysis.

2. Errors and inaccuracies

CPAs often do their tasks independently or have a few members on the teams. Human errors during invoice processing or payment approvals are common with CPAs, and this can lead to significant financial discrepancies. Even small errors can snowball into major issues, leading to delayed payments, penalties, or customer dissatisfaction.

3. Poor cash flow management

If the accounts receivable processes are faulty, this can result in delayed collections, negatively impacting cash flow. Similarly, poor AP management can result in missed discounts, penalties for late payments, or strained vendor relationships.

4. Limited technological resources

Most CPA-led businesses lack the technology to automate AR/AP processes, hindering efficiency. Without automation, it’s difficult to scale these processes as business grows.

Why outsource your accounts receivable and accounts payable processes?

1. Improve efficiency with automation

When you outsource your accounts receivable and accounts payable functions to a team of expert professionals, you get access to new and advanced technologies and automation tools that are specifically designed to handle your AR and AP processes. By automating these processes, outsourcing partners can help reduce manual data entry, automate invoice generation and approvals, and ensure timely reminders of payments and collections. Buying and setting up this software allows you to access these technologies without burning a hole in your pocket.

2. Improve accuracy and reduce errors

Once you gain access to the software at a reduced cost by outsourcing, your accounts receivable and accounts payable tasks become more seamless. Handling complex calculations with no errors also becomes possible. Your outsourcing partners also free you from the responsibility of ensuring that the invoices are processed accurately and payments are made on time. Automation further reduces the risks of human errors, ensuring more accurate financial reporting.

3. Helps improve your cash flow management

Outsourcing allows you to manage both accounts receivable and payable more effectively. Timely invoicing, monitoring outstanding payments, and managing collections can improve cash inflows, while efficient payment processing can ensure vendors are paid on time. This leads to smooth cash flow management, which is critical for the financial health of any business.

4. Helps save costs

When the goal is to build an ace team, you need dedicated professionals for AR and AP teams. But this is fairly difficult for the CPA-led businesses. By outsourcing, you can reduce the overhead costs while gaining access to the expertise. CPAs can save on hiring in-house staff, salaries, benefits, infrastructure, and much more. Additionally, you can scale the operations without the additional costs.

5. Easy scalability and flexibility

The need for a seamless AR and AP process is directly proportional to the growth of your business. Outsourcing providers are experts in the field and will offer scalable solutions that allow you to grow your business. Whether it is the increase in transactions or additional reporting capabilities, outsourcing experts can curate their offerings uniquely to meet your needs.

How does outsourcing help streamline your accounts payable and accounts receivable processes?

1. Shorten the transaction cycle

Outsourcing helps implement faster and more efficient processing methods. They use advanced technology and optimized workflows to ensure invoices are generated and processed promptly. This shortens the wait time for receivables and enables faster payments, resulting in improved cash flow. Additionally, outsourced teams can set up automated schedules for issuing purchase orders and invoices, ensuring consistent and timely documentation.

2. Management of outstanding accounts

Outsourcing partners monitor outstanding accounts and follow up on overdue payments. They have tools and strategies to handle aging receivables, ensuring that past-due accounts are managed efficiently. By maintaining constant oversight of old accounts, outsourced teams help keep the books clean and minimize collection delays. This proactive approach ensures that overdue payments are swiftly addressed, improving overall financial health.

3. Establishing and enforcing credit policies

Outsourcing partners help streamline the establishment and enforcement of credit policies. Experienced providers can help set tailored credit terms based on client profiles, ensuring that regular customers with good credit histories receive favorable terms while new or riskier clients are assigned stricter policies. On the payable side, outsourced teams ensure that vendors are paid promptly upon delivery of services, maintaining good relationships and reducing liabilities.

4. Improved tracking with automation

The right outsourcing partners utilize automation tools to simplify tracking all financial transactions. Automation systems help create and manage invoices, receipts, purchase orders, and other critical documents, reducing the risk of human error. With real-time visibility into both receivables and payables, businesses can easily track transactions, avoid discrepancies, and ensure accuracy in their financial records.

Streamline your accounts receivable and accounts payable processes by outsourcing

Get the right outsourcing partner and make your accounts payable and receivable processes seamless today!

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