Members of the accounts payable (AP) department are often the unsung heroes of a company. As long as they ensure a smooth way of handling and managing the company’s invoices, the business will gain benefits in terms of cutting down costs and enhancing output. Therefore, it is greatly important to guarantee the efficiency of the whole team.
In making the department’s workflow cost-effective, many companies recognize the advantage of utilizing cloud-based or online accounts payable tools. However, this is just one vital aspect of the whole streamlining process.
Follow these seven simple tips to get the most out of your AP team:
Assess your workflow and structure
The performance of the AP team significantly affects the cash flow of any organization. If you’re firm frequently encounters delayed payment or missed opportunities to avail discounts from suppliers, it’s high time you re-evaluate the workflow and structure of this specific department. Designate key roles and if your business is indeed large enough, perhaps it’s better to invest in an accounts payable professional.
Identify weaknesses and look for areas to be improved
In assessing the basic structure of your AP processes, you would also need to identify weaknesses and lay out appropriate solutions. Look into how long it takes for the department to clear and pay off invoices, or how many times suppliers are paid off, and eliminate unnecessary steps.
Automate and digitize paper-based procedures
Trading papers for cloud-based platforms help a lot in performing day-to-day tasks and obligations. Using an online accounts payable software and digitizing paper-driven procedures are key in decreasing processing costs, and preventing human errors and fraudulent behaviors. Just ensure that when you make use of such a technological method, the members of the AP team should receive proper training.
Employ a standard accounts payable process
Centralizing your invoices in one repository goes a long way. This simple standardization process translates to easier access and tracking of the products and services that need to be paid. You can also use the so-called “aging report” to handle invoices according to their due dates.
Improve vendor relationship
The AP department manages transactions that directly involve your business suppliers. Therefore it is only fundamental for the team to foster a sound relationship with these vendors. Establish trust by guaranteeing on-time and accurate payments. This trust will bring many perks — from getting discounts to even delaying a payment deadline.
Keep track of your contract agreements with the suppliers
For a business to maximize profits, looking for and dealing with the best suppliers is an essential obligation. To make sure that every money spent by the company in paying off vendors yields a high return on investment, it is important to regularly keep track of contract agreements. If they are outdated, or if they feature sub-optimal pricing, it is time to renegotiate or look for new suppliers.
Regularly analyze your spend data
Having an online accounts payable software also gives the advantage of easily extracting spend analysis reports. If you have a good and accurate picture of your business’ spend information, you can subsequently improve the whole AP and purchasing process and help create a more effective budget plan.
Nexus is a leading provider of online accounts payable solutions for real estate. Check out our website for more info or contact us today for a demo.