Duplicates could result in double payments, increasing expenses, and decreasing profitability and cash, adversely impacting cash flow management. This is like having extra sets of eyes on all of your vendor invoices before payments go out. Outsourcing your accounts payable processes doesn’t mean losing control. On the contrary, it gives you a newfound sense of above the line below the line financial concept control and visibility.
- If a contract with the vendor does not cover exceptions in processing, then your business has to deal with it separately.
- One of the biggest benefits of outsourcing accounts payable processes is the potential for significant cost savings.
- For many businesses, invoice data entry and payables management are not always 100% integrated into business functions, so it can often be lucrative to outsource this paperwork.
- In this article, we’ll explore exactly what accounts payable outsourcing is, the reasons for outsourcing, pros and cons, and how AP software may be a better choice.
Assessing Provider Capabilities for AP Outsourcing
When a company uses accounts payable outsourcing solutions, it pays for the services of experienced professionals who don’t need internal training. A paper-based accounts payable process makes it nearly impossible to improve visibility, and thus, long-term strategies. Storing vendor information, invoices, and receipts in a filing cabinet makes it difficult to predict financial issues or recognize opportunities accurately. With Accenture’s transformative solutions, companies can say goodbye to manual data entry and tedious paperwork. Instead, they can embrace a future where intelligent automation takes care of the mundane tasks, allowing employees to focus on more strategic and value-added activities.
Tips for Choosing the Right Accounts Payable Service Provider
Hence, selecting a credible outsourcing company to work with is essential. Or, you can choose to install intelligent AP automation software that poses little risk to your security. AP solutions are not just for big businesses with a high volume of payments. Whether you outsource to a third-party provider or purchase AP automation software, the cost savings are there.
Even a small error, such as an inaccurate payment to a vendor, can cause serious problems during an audit. Managing your relationships with vendors and suppliers is challenging enough. To ensure smooth onboarding and efficient coordination, everyone needs to be on the same page. Read our guide on everything you need to know about nearshore outsourcing.
You would rather pay for an AP service rather than hire more AP staff
Let’s unlock the mind-boggling benefits of accounts payable services and revel in the sheer joy they bring. Picture a world where the tap of a finger is all it takes to settle invoices. Say goodbye to the days of tedious manual payment processing, and say hello to the comedy of watching invoices being paid with effortless ease. Sit back, relax, and let the laughter unfold as you witness the wonders of automated payment processing. Since you are not physically present to supervise tasks, mistakes may not receive due attention.
Complete Guide to Accounts Payable Outsourcing in 2024
This is especially prevalent when businesses experience periods of rapid growth, which is often accompanied by an increase in invoice volume. While this is great for sales, it also puts additional pressure on your AP staff. This is especially the case for paper-based processes and those manually entering data, chasing down approvals, and heavy PO-based processes. Every additional invoice adds further load and over time, dampens AP productivity. If there are limited resources within your accounts payable (AP) department, it’s key to identify how the function can scale to better process invoices when volume increases.
Accounts payable outsourcing can increase the efficiency of your AP processes by streamlining vendor invoices and payments. Since everything is organized, you can also make early settlements of vendor bills to get better discounts. A growing company may require more in-house accounts payable department personnel to manage its increasing needs for processing accounts payable functions. Thus, a business should weigh the pros and cons of outsourcing accounts payable before deciding on handing over accounts payable functions. However, not investing in some form of AP support will cost you more in the long run. Especially if your business is still tied to paper processes and manual data entry.
The pricing could be more cost-efficient and profitable than the overhead expenses necessary to hire and train new personnel when your business relies on manual processes. By establishing clear expectations and maintaining a strong working relationship with the outsourcing provider, businesses can maintain appropriate control over their accounts payable processes. Invoice receipt and processing is a crucial aspect of accounts payable outsourcing services. Providers offer services such as receiving hard copy and electronic invoices, matching invoices with purchase orders, processing debit memos, and image and data capture.
Accounts payable outsourcing is the process of hiring a specialised service provider who can take over multiple AP functions that businesses find difficult to handle in-house. Growing businesses have to maintain relationships with many suppliers and vendors, and this usually ends up making the Accounts Payable process complicated. Vendors with different invoicing standards/procedures tend to make accounts payable processes quite cumbersome. Communication – Every reputable outsourced AP vendor will have some sort of live customer support, but how they communicate with you will be on their terms. There’s unlikely to be a lot of deep insights that may help your business run better, smoother, and more efficiently from a financial perspective the same way a rockstar AP department would.
