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The Ultimate Guide To Streamlining Your Accounts Payable Process
Let’s face it: the process of improving and streamlining your accounts payable process can feel like you’re drowning in a sea of busywork. It’s also one of the most important, yet overlooked, processes within a business that can actually make you go from negative to positive in monthly ROI. This is especially true with online businesses, as many of use are using various automation, SEO, and marketing tools that have built-in recurring monthly costs… but how many of them are we actually using, yet still paying for?
This is something I occasionally talk about on the blog, as it’s a great reminder to always keep an eye on not just what your monthly expenses are, but also what they are actually being spent on. We all watch the incoming and outgoing money within our businesses and brands, but many of us will forget to actually look through our credit card and banking statements to see who is billing what. Soon enough, you could have thousands in monthly recurring bills, and not even realize that you aren’t utilizing such services.
It’s not just affiliate marketers and bloggers that have to deal with these types of issues, it’s businesses of all sizes — and it really comes down to the various payment processors, invoice tracking, and tax software being used. The truth is that an inefficient accounts payable system costs you in time , money, and anxiety. Between chasing down your tax information, waiting for invoices to be verified, and frantically paying bills at the last second, things will slip through the cracks.
You won’t just lose money. Your company’s reputation will suffer as a result. You might lose important business relationships that you’ve worked hard to build.
It’s time to make a change for the better.
Read on to learn how to improve your current accounts payable procedures.
1. Look for Patterns in Your Payments
The first thing that you need to do when you’re ready to make over your accounts payable process?
Think about how you can get out in front of upcoming payments.
The best way to do this is to look for payment and invoice patterns, and then create a matching schedule of accounts payable.
For example, do you know that your supplier sends you a bill on the first Monday of every month? If so, you know that this payment to your suppliers is a fixed cost every month. You should schedule an automatic payment, since it will likely be in the same amount each time.
Additionally, figure out who you sent the most money to, the most frequently.
This will help you to keep better track of your spending pattern, and know who to prioritize when it comes to getting payments out on time.
One more thing you might discover during this review process?
The fact that you’re not exactly spending your company’s money in the most effective way. Taking a closer look at things won’t just help you to spend less time each month on accounts payable.
There’s also a good chance that it will help to save you some serious money.
2. Define Your Invoice Payment Strategy
You know that paying invoices on time and in the correct amount is an essential way to maintain excellent relationships with freelancers and suppliers alike.
However, if you’ve noticed that your accounts payable process seems to be missing the mark when it comes to invoices?
You need to make a change — and fast.
First of all, decide when you’ll pay the invoices that are sent to you. Is the goal simply to get them paid as quickly as possible? Or, is it better to send payments at a set date?
Determine the payment method that you use. Will you write them a check, or do they prefer to get their money sent to them via systems like PayPal? And which method of payment works best for your business?
You should also make sure that you have a strong record-keeping system in place when it comes to your invoices. That way, even if something does go wrong, you’ll be able to track exactly when and how it happened.
One final piece of often-overlooked advice?
It’s simple: make sure that you have the right employees working on accounts payable.
Is now the time to create a specific accounts payable department, as opposed to assigning invoices to “whoever has time” to complete them? What short of qualifications do the people working in accounts payable have? What sort of training program have you implemented?
These are certainly all things to consider — and to speak with your team honestly about.
If you need to hire someone new, then the cost of bringing them on will likely pay for itself in the time the rest of your team members will earn back.
3. Consider a Payment Automation System
Of course, if you’re truly serious about improving your current accounts payable process, then you’re likely going to need to invest in a payment automation system.
Look for a system that allows you to make payments in a variety of currencies and payment methods. You should also decide on an option that helps you to eliminate as many rejected payments as possible.
The goal here is to find a platform that helps you through every part of the AP process — including making early payments.
Also, ensure that the payment automation system you choose helps you to keeps things secure and compliant. The right system will scan potential payees and identify potentially fraudulent or problematic companies.
Finally, make sure that you take a close look at the transaction fees of any payment automation system you use. Remember that fees are usually charged on a per-transaction basis. So, cut down on the number of individual payments if possible.
Looking to learn more about what makes a great payment automation system?
If so, be sure that you check out the Tipalti website, to learn how their platform could save up to 80% of your accounts payable team’s time.
Once you’ve implemented each of these solutions and accounts payable processes, you may finally be at zen with your personal and business finances.
Ready to Overhaul Your Accounts Payable Process?
We hope that this post has helped you to understand what it takes to truly improve your accounts payable process — and eliminate errors in the process.
Of course, tackling accounts payable is just one smart of what helps you to streamline your time at the office, and get more out of every day.
You need to ensure that you have a strong digital and print marketing strategy, that you employees feel motivated within the work environment, and much more.
Keep on coming back to our blog to score even more tips on how to take your company to even higher heights.