5 ways to untangle the accounts payable process and eliminate stress
In the intricate web of business operations, the finance team often remains in the shadows when it comes to process enhancement and technological upgrades. Nevertheless, their role is pivotal in maintaining operational smoothness and nurturing strong supplier relationships. Despite their time constraints, these teams are entrusted with the responsibility of prompt payments, fraud prevention, error rectification, payment planning, and working capital optimisation.
This article delves into five strategies to boost productivity, ensuring invoices and payments glide through the pipeline seamlessly, all while minimising stress.
1. Standarise and train for efficiency
For smaller finance teams, payment practices might evolve into a complex and disorganised mess over time. If you find yourself grappling with ad-hoc invoice processing and constant error fixes, it's high time to reassess your procedures and instate an accounts payable process tailored to your business needs.
2. Early digitISaTion with modern tech
Delaying invoice entry until payment looms is a common practice for small businesses, but it comes with drawbacks. Entering invoices promptly into your general ledger yields benefits like cash flow planning, preventing late fees, and avoiding supply chain disruptions due to miscommunication or visibility gaps. Using tools like HubSpot, Autoentry, or Dext makes it easy to prepare invoices early on.
3. Transition to batch processing
Transitioning to batch processing often unfolds gradually as team members consolidate similar tasks within their routines. Take the plunge into batch processing as a team instead. Establishing and communicating frequency and deadlines for different steps fosters team alignment, minimises delays, and helps performance monitoring. Implementing bi-weekly payment runs, for instance, consolidates routine tasks into defined routines, boosting efficiency.
4. Empower with delegations and approvals
A streamlined payment process paves the way for further optimisation through delegation and approvals. Clear-cut processes empower newer team members to contribute effectively without undue stress or errors, while senior members focus on strategic endeavours. Mid-market ERP systems and AP automation tools offer approval processes with designated roles and access controls.
5. Harness cloud-based automation
Automating invoice approvals and payments offers substantial benefits—according to Netsuite, manual processing costs can plummet from $10 to $2.07 per invoice, a staggering 79% reduction. With the prevalence of cloud-based accounting and ERP systems, an array of apps caters to streamlining workflows, even for smaller businesses. These apps integrate with systems like Xero, Sage, Netsuite, or MS Dynamics, importing data, facilitating approval routing, scheduling payments, and syncing processed payments back to the ledger. HedgeFlows, for instance, simplifies the entire process from approval to payment scheduling and reconciliations, ensuring smoother operations.
Conclusion
Untangling the intricate accounts payable process web and banishing stress demands a multi-faceted approach. By standardising processes, embracing digitisation, delegating smartly, adopting batch processing, and leveraging cloud-based automation, finance teams can ensure timely payments, mitigate errors, and foster efficient supplier relationships. This not only improves the financial ecosystem but also cultivates a healthier work environment, free from unnecessary anxiety.
Do you have any questions? Feel free to get in touch.