For many businesses, the accounts payable department does not receive attention unless something goes wrong. But this department often has an enormous effect on a business’ cash flow, and there are opportunities that can be gained from taking advantage of payment agreements with suppliers.
FREMONT, CA: A well-maintained accounts payable department should be able to maintain volume and early payment discounts as well as determining favorable ways to keep the cash available to a business for other investments and expenses. This department should also ensure that suppliers are meeting their requirements based on contracts and agreements so that if volume or quality standards are not met, appropriate corrective actions are taken.
Common Accounts Payable Problems:
Although there are numerous prospects for reducing costs and freeing up cash, there are also several hindrances that businesses face while attempting to achieve these goals. Paper processing is one of the largest sources of problems for many organizations. Other significant causes of concern are:
• The guarantee of timely payments.
• The streamlining of the invoice approval process.
•The acquirement of best payment terms with suppliers.
• The transaction with a variety of supplier accounting and invoicing systems.
• The recording and verification of the security of data and transactions.
Check out: Top Account Payable companies
Three of the most efficient ways through which businesses can streamline their accounts payable processes are:
Use of OCR:
Object character recognition (OCR) entails scanning a document and salvaging data from it. The OCR process assists in reducing the issue of manual data entry faults and enables information to be inserted as soon as the paperwork is received.
Online Supplier Portals:
An efficient process for entering data and invoices into a centralized system can allow businesses to take advantage of an online portal that can track orders, look at invoices, and see when payments are made. The availability of this data to several individuals within an organization can guarantee that the accounts payable division has proper supervision, and it can help streamline the entire process.
Creation of Management Workflows:
It is crucial that there is a recognized process in place for managing payments and accounts. The accepted method enables companies to figure out alternatives if errors or delays occur. The establishment of workflows for dealing with faults issues helps organizations make the right choices without any delays.