Is your accounts payable department efficient and leveraging best practices? It is true that the payables industry has transformed over the past decade and seen the need for more changes during the start of this pandemic. Earlier AP was merely an operational necessity without strategic optimization of AP automation solutions. However, today the need to operate remotely, rapid adoption of self-service supplier portals, and the rise of accounts payable automation software have paved new ways for AP operations.
Listed below are the best practices and Accounts Payable benchmarks that will help ensure that you stay ahead of the curve and keep your account payable processes running smoothly:
Digitization is the key
Are you still juggling with paper invoices and envelopes? Technology and efficiency are directly proportional to one another. Use technology to ensure that your paper processes and accounts payable statistics are automated. It is the only way you can save massive amounts of time, reduce human error, and save money.
Streamline and Automate
By automating the invoice-to-pay workflow, you can eliminate more than 80 percent of your manual workload and reduce touchpoints and errors. As per accounts payable best practices, an ideal invoice workflow should leverage OCR (optical character recognition), AI (artificial intelligence), and managed services. With OCR, the data is captured automatically from invoices thus eliminating data entry errors. The 3-way matching process like that in Easy Access automatically compares data captured from the invoice with the data on the invoice. Duplications are reported to be resolved, saving time and ensuring accuracy.
Use a supplier portal for your benefit
A supplier portal allows your vendors to opt-in and choose the payment method they prefer, provide their payment and contact information, and access payment information on the go.
Error-reduction is another value-addition of self-service supplier portals. Real-time validation of Tax Identification Numbers, payment information, and address details help manage the supplier information better and accurately. Digitization plays a pivotal role in this, achieving your accounts payable KPI benchmark.
After digitization and a state-of-the-art supplier portal are in place, it’s time to think strategically. By providing early payment discounts, you can transform your accounts payable processes department from a cost center to a profit center. It is good practice to offer discounts like these to create a strategic differentiator, allowing your suppliers to increase their liquidity by getting paid faster.
ERP Integration has a myriad of benefits
Integrating the AP system with an accounting system, enterprise resource planning (ERP) can eliminate the friction in invoice processing, supplier payments, reconciling AP, and manual tasks.
A pre-built integration allows real-time payment status visibility without navigating out of your ERP or dealing with the complexity of API. At the same time, a bidirectional integration ensures up-to-date information within both platforms and simplifies the process of reconciling your payables with the general ledger.
Simplify your AP
Simplifying and streamlining AP means different things within different organizations, but the basic principles are:
- Multiple AP departments can create redundancy.
- The bigger a company, the more possibilities exist for AP processes to be fragmented.
- Payment disbursement and invoice processing should happen in one central business unit or location, however big the organization is.
Control & Reporting
Accounts payable automation software like EasyAccess ensures improved productivity, increased accuracy, and up-to-date reporting that gives you complete control over your finances, budget, and cash flow. You have a clear view of the invoice status and your AP benchmarks. Accurate data and reporting enables the business to practice data-driven management and is essential in identifying trends and making informed decisions.