Many businesses consider managing and optimizing their accounts payable to be a responsibility better left to the machinations of the accounting department. However, in actuality managing your accounts payable system is as important as managing your sales, marketing, and product development and management. Thankfully, with accounts payable automation and other innovations, it’s possible to make this somewhat time-consuming exercise a bit more manageable.
The following is a list of ways to streamline and improve your company’s accounts payable systems through various methods, chiefly amongst them, the application of AP automation.
First Things First – Automate Your AP
To properly monitor and oversee your accounts payable, you should plan on having a system to automate your AP processes. This includes implementing a digital solution in which you can easily access each invoice, file and payment associated with your accounts payable information. To properly apply accounts payable automation, you should focus on driving towards the ultimate goal of going completely paperless, while also streamlining your payment process and activities.
Once you have implemented your AP automation system, you should outfit it to automate each component of the AP workflow, approval, exception handling and payment process. Also, by making all your accounts payable solution accessible on secure cloud-based servers, you can easily access all AP information from mobile devices and computers anywhere in the world.
Make AP Management a Strategic Role
For your company to thrive, it is essential that your AP department is positioned as a strategic group within your organization. With proper oversight of the AP function, you can ensure proper cash flow and ultimately drive your bottom line.
With a strategic AP manager or director in place, a steady hand in charge can ensure that the more significant aspects of your AP processes are tended to in regards to sensitive circumstances like your budget and your supply changes. Furthermore, an AP manager or director can provide critical data and visibility into the financial status of your organization in real-time.
Build Up Vendor Confidence
To get the most out of your accounts payable system and AP automation as whole, you should use it to create more effective relationships with your most important suppliers. If there happens to be a vendor that you tend to order from in bulk, by linking them to your accounts payable through an inventory network you will give them more options regarding settling accounts with your company.
By utilizing a vendor portal with your AP automation, you can negotiate a discounted payment term in exchange for expedited payments or other terms, sometimes referred to as dynamic discounting or early-pay discounts. You can also arrange for automated purchases dependent on your current inventory levels and direct supply levels, while also overseeing automated payments. Your vendors will be more apt to offer discounts when you significantly simplify your accounts payable system and make it easier for them to bill you and receive payments.