Posted By Ash Conversions International
For today’s modern business, technology has allowed us to reach more customers and suppliers than ever before. Today, a business can buy products, materials, and even seek out specialized expertise from partners all across the globe, and communicate with them throughout the process. This has helped small businesses form, larger businesses expand, and it’s benefited consumers across the world, too. But one team who might have a hard time keeping up is the accounts payable department.
With different billing periods, tax rates, time zones and discounts to keep track of, the modern accounts payable department has their work cut out for them. And if invoices are still managed manually, or even semi-manually, that process can quickly become slow, tedious, and overwhelming. Luckily, technology is there to make life in accounts payable that much easier. If you’re currently labouring in the accounts payable field and feel like you’re drowning – or, you just want to make things a bit more efficient, enjoyable and hassle-free, then below are some useful strategies to get you off the AP treadmill. The key to all of these is efficient planning and automation across the organization. Hopefully, they will help you save time, money, and sanity – especially during those mad scrambles at the end of the month.
This first strategy involves a simple change to the way you might be doing business. While it may sound obvious, we’re surprised at how often we hear of businesses that still receive their invoices on paper in the mail. In many cases they’re reluctant to change this, because it can involve developing a new process for a supplier, or because that’s simply “the way we do things.” All it takes is one email or phone call to request that your supplier make a change to their billing routine, and more often than not, they should be more than willing to make accommodations. From there, the benefits of receiving all of your invoices through email are twofold. The first benefit is having all of your invoices in one place. You can sort them by date or by company, or put them all in one folder to manage them more efficiently. It’s the second benefit that may surprise you; and that’s the opportunity to use automated invoice software. This can categorize suppliers and payment dates, and calculate additions like tax rates and sales discounts so that you don’t have to. Having all of your invoices in one place and at your fingertips will save you time and effort.
Oftentimes we hear from businesses: “If we processed each invoice right when we got it, we wouldn’t be so stressed at the end of each month.” But it’s reasonable that urgent projects get immediate attention, and sometimes it can be hard to break out of one’s daily routine. That’s where teamwork and collaboration can come in handy. Instead of a few overwhelmed employees forced to tackle hundreds of invoices, you can empower more team members to manage fewer invoices and payments. Perhaps account managers can process payments directly related to their accounts, or perhaps an office manager can work more collaboratively with the accounting department. Employees might appreciate new challenges or a change in routine, and with all of your invoices together, accounts payable can delegate some invoices to certain employees. That way, invoices can be completed quickly and efficiently, and accounts payable doesn’t have to feel overwhelmed at the end of each month.
Do you find that you’re often peforming the same tasks or processes, in a routine that becomes so mindless that you could do it without thinking? This is where automation can make the biggest impact. Many businesses order the same supplies from the same provider on a routine basis, or make the same administrative payments again and again. These are the types of tasks that are prime for automation software that’s specifically tailored to these types of functions.
It may take some time and training to ensure that your employees understand the system, but once you’ve gotten over that hurdle, you’ll notice a number of important benefits. Firstly, the human errors that can become inevitable when dealing with so many different invoices will be quickly minimized. Furthermore, your employees will be happy to eliminate some of the more monotonous parts of their role, and they’ll have more free time to complete more urgent tasks across the business.
While automation can help reduce human errors and increase efficiency, there’s another important step we recommend to further improve efficiency; that’s the adoption of performance metrics for your accounts payable department. While the exact metrics you use may depend on your industry and type of business, there are a number of measuring sticks that are relevant to almost all accounts payable departments.
For example, the total number of invoices paid and remaining, average processing time, and incorrect payments made are all different types of benchmarks that your department can use. This strategy is a little bit different than our previous suggestions, because this should lead to continuous improvement for your department. Efficient organization and automation can spur initial improvements to your business, but these metrics ensure that your department can improve month after month, and year after year. Finally, tracking performance metrics can help your organization use more precise data, and instill greater accountability on your team – two things that will certainly benefit any accounts payable department.
The one accounts payable strategy we want to emphasize more than any other is this: your business should seriously consider eliminating paper invoices. Unlike emails or online documentation, paper can accidentally be damaged or lost, and it happens far more often than anyone would like to admit. Simply put, for every piece of paper your business relies on, there’s a chance that piece of paper could go missing. Whether it’s for immediate billing, end of year taxes, or an audit down the road, your business is too important and complex to be searching for small pieces of paper. Some prefer emails, some prefer Excel files, and some prefer software specifically designed for accounts payable. But whatever your preferred online documentation method, we recommend getting started today! Once the project of putting all of your invoices together is complete, you’ll start to experience benefits right away. Employees will be able to get key tasks done quicker, and new employees will be onboarded faster as well. Later on, being able to easily compare prices over time, and between suppliers will offer you the ability to make important strategic decisions, faster and easier than before. In the short term and the long term, documenting your payments online can do so much more good than you expect. So what are you waiting for?
At Ash Conversions, we’ve been a leading provider of innovative document and data management solutions for almost 4 decades. Using workflow automation, we are helping clients manage their accounts payable process more cost-effectively, in diverse industries ranging from government and healthcare to manufacturing and financial services.
For more information about our services and how they can benefit your organization, call 1-866-340-9774 today, or contact us here!