Many businesses prioritize accounts receivable (AR) due to the fact that AR is an income-generating activity. It’s also important, however, not to overlook accounts payable (AP), and potentially use automation due to the critical role it plays in your business.
Accounts payable, when managed and tracked correctly, allows your company to more accurately forecast and track your cash flows. This type of forecasting can be invaluable when making business decisions a few quarters in the future. This is especially true if there is an unexpected event your company must react to quickly.
Additionally, your accounts payable can influence your company’s credit score, impacting your ability to secure loans when you need to grow your business or invest in capital expenditures.
In this guide, we’re going to walk through several ways your business can quickly and efficiently improve your accounts payable process.
1. Use AP Automation Software
Is your company still working through your accounts payable workflows manually? If so, using AP automation software in your business can improve your efficiency exponentially.
By automating your accounts payable process, you’ll be able to reduce delays and bottlenecks within your business.
Think of when approvals for invoices are required. Typically, an invoice would sit in an email inbox or on a desk until the appropriate person gave their approval. With automation, all of those delays will be eliminated by ensuring that each invoice is sent to the appropriate person directly and having automatic follow-ups to ensure everything is approved in time.
You’ll also improve the accuracy of your AP Workflows, and reduce the chance of human error. By automating certain aspects of your AP process, you’ll be able to automatically run your invoices through verification checks built into the accounts payable software. Then, remove the need for manual data entry and the chance of typos making their way through the system.
Finally, using automation in your accounts receivable workflows provides you with detailed insights and data, allowing your company to make actionable business decisions based on data you wouldn’t have otherwise had.
All in all, using automation software is how your business gets to the next level in terms of AP efficiency and productivity.
2. Transition to a Paperless Environment
Even though physical paper can be comfortable when it comes to important records, embracing the digital revolution and going paperless is how companies are able to significantly improve their accounts payable team’s productivity.
Nowadays, going digital is safe and secure when the appropriate tools and security measures are implemented, allowing your business to have peace of mind when starting the transition.
The “digital paper trail” created by having all of your supplier or vendor communications in one location is also invaluable, as it allows you to quickly…