In the last few years, there have been lots of changes in account payable operations. Along with trying to improve efficiency, these changes also help to combat fraudsters who are using the latest technologies in terms of payable operations which can be a huge loss for small and medium sized companies.
Every company undergoes an auditing process, which in turn reveals the negative part of the payment process for the company. Once the auditing process is complete, the type of over payments that have come into the picture need to be explained by the accounts team. To overcome this problem, we list down the best practices for accounts payable operations, and cover everything from invoice handing to payment processing so you can do your job better. The top 10 practices for accounts payable operations to optimize spend management include –
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Overcome the Vendor Payment Status:
One of the problems which the accounts payable department has to face is the constant call from vendors inquiring about the status of their invoices. Worse, the accounts payable team has to research about the invoice and return the call. In order to overcome this problem, you need to set in place good policies and payment processes which will not only ensure payments on time, but also reduce the frequency of disturbing and time consuming vendor phone calls every so often -
Payment Timing:
Payment processes generally tend to get stretched due to some internal issues or a cash flow problem. So, in order to overcome this problem, always ensure that you the pay right amount to the right vendor at the right time. This policy helps the accounts payable department to solve the payment issues and properly work on spend management -
Customer Service in Accounts Payable:
Every company needs to carry a “Customer is always right” attitude. The accounts payable department has different customers like –- Vendors looking for payment information
- Employees looking for expense reports
- Purchasing professionals looking for suppliers information
Instead of getting harried, you need to place yourself in their shoes and understand their problems. You need to keep the best person for answering vendor inquiries and thereby optimize spend management
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Work with the Purchasing Department:
Accounts payable and purchasing departments in many companies never go hand-in-hand. The Accounts department is more integrated into finance and accounting chain, and hardly communicates with the purchasing department. Bringing them together can help raise your operational efficiency, and the best practice to follow is to work on the friction between both the departments, while understanding the issues. Looking at the problem from two sides of coins can help you to craft solutions and ensure better process optimization -
Communicate with Internal Customers:
For a company, good communication within the organization is essential. This stands especially true for the accounts payable department. The payable department needs to communicate with the company in order to ensure both their and the company’s requirements are suitably fulfilled. Some of the ways in which this can be achieved include:- Sharing AP policy
- Periodically sending AP newsletter
- Publishing name and contact information of staffs
- More transparency in day-to-day operations
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Overcome Technology-related Frauds:
Thankfully, technology has made the accounts payable job much easier than the traditional methods. It’s a good sign that the people involved in accounts payable have been the latest technology while performing regular accounting work. However, one cannot overlook security issues, especially those which give rise to ACH fraud. In order to overcome technology accounting frauds, the company needs to create a corporate policy regarding the use of personal devices. The devices should have anti-virus and anti-fraud software, as well as feature integrated security measures and two-factor authentications in order to avoid any accounting issues -
Invoice Automation:
In many companies, the accounts payable department uses automation to create invoices, thereby allowing them to work faster and more efficiently. However, most of the automation is handled by third parties. The price for the service is comparatively low, but rather than outsourcing it is better to do it in-house. You should make it a point to attend vendor demos and learn more about different vendor models, and how automation can streamline your processes -
Gravitate towards E-mailed Invoices:
For different people, e-invoicing and electronic invoicing can be different. Many companies now receive invoices through e-mail which is faster and easier. As a company, you need to encourage vendors to use e-invoicing systems and email it. This will certainly benefit both customer and supplier -
Leverage the Power of Social Media:
No doubt, social media plays a major role in companies who want to reach out to their target audience. But using this platform can even help companies find the rightful owners of un-cashed payroll checks and help solve other accounting issues -
Upgrade to Better Hardware Technology:
Companies need to develop a plan to address the hardware requirements of the staff. This also includes the cost of system upgrades and training employees for using the same. Better quality hardware means work can get done at a faster pace, and if you are still stuck with ancient technology, this is the time to move on to better hardware and increase your operating efficiency
Flatworld Solutions offers account payable service for small and medium sized businesses, as part of an extensive roster of Finance and Accounting services. If you are seeking a reliable company then get in touch with us right now or leave your message in the comment box.
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