5 Best Practices to Improve Accounts Payable Processes

invoice mmphoto/Adobe Stock

Spend Matters welcomes this guest contribution from Steve Johansson, director of marketing at iPayables.

The act of processing your invoices and handling your accounts payable has traditionally been considered a reflexive function of business, but in today's digital age it can become more strategic. Automated accounts payable solutions have undergone a significant evolution regarding efficiency and functionality, primarily through software that streamlines the entire process to ensure that best practices are being implemented consistently.

The following is a list of methods you can use to within your accounts payable team to streamline your business and maximize the benefits of digital technology.

1. Gather All Supplier Invoices Digitally

Using automated accounts payable you can deal with three of the main challenges of AP processing. You won't have to worry about manually routing your invoices, manually entering your data, or dealing with invoices in a paper format. This is where most people find their accounting budget spent when they don't automate their accounts payable system. It's very costly to invest this much time and money into a service that can be automated and collected in one database.

2. Automate Your Invoice Validation and Matching Functions

Once your system has been automated, and your invoice files have been digitized, it's time to pause technology to the verification process for each invoice. With automated AP you can verify your invoices to line up with your purchase orders perfectly as well as your requisition information. By doing this, your accounts payable department will be able to focus on getting invoices approved as well as reviewing exceptions instead of spending their time entering and data manually.

3. Cut Down On Excess Invoices

The best way to start cutting down on your rate of monthly invoices is to review your current invoice stream. First, look for a concentration of low dollar payments made to suppliers that you've only used on a few occasions. Also, look for any expenses connected with employee travel and employee entertaining. To limit your invoices, shift these purchases onto a commercial credit card. There will be no checks to deal with, and you will not need to sacrifice control of your expenses or additional time handling additional and redundant invoices.

4. Move Over To Fully Electronic Payments Away From Checks

By migrating over to electronic payments, you will have a number of advantages using forms like single-use virtual accounts as well as ACH. A bit more than half of all current B2B payments are surprisingly still using checks, and the cost of having a check sent is more than ten times the cost of receiving and sending ACH transactions. Consequently, companies opting for the check payment method are wasting funds.

5. Concentrate All Your Disbursements

By utilizing only a centralized payment process will help you manage a greater volume of payments, using fewer resources. By allowing your staff to approve payments under the purview of your ERP or your current accounting system you enable them to send a single consolidated file of all of your ACH payments, checks payments, Virtual card payments, and Wireless transactions directly to your bank.

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