If you’re running a business or the finances of a business, you likely have a process in place for sending payments to vendors for supplies, services, etc. This is part of every business’s accounts payable workflow or accounts payable process. It’s also one of the final steps in the purchase-to-pay cycle. The life cycle looks something like this: the accounts payable department receives, verifies, and routes an invoice for approval, then they send payment. While this process seems simple, poorly handling it can lead to many problems and issues within a company.
At Accounting Seed, we often work with customers to help streamline this process and make it more efficient. Here are some actions every business owner or accountant can take to improve their vendor payments process.
Use Vendor Payable Software to Pre-Schedule Payments
Using automated accounting software, you’ll make everyone’s lives easier with automatic vendor payment processes. Schedule recurring payments for your consistent service and goods partners so that they receive them on time every month.
You’ll never have to take time out of your busy schedule to handle procurement. Partners will trust you and feel less stress knowing their payments are coming as usual. And, your vendor payments will automatically be added to your general ledger and financial dashboards.
Keep Your Vendor Relations in Good Order
Since the pandemic, American businesses have gotten even worse about paying vendors on time than ever before. By making a genuine effort to stand out from the crowd by paying on time and prioritizing good communication, you’ll establish trust with vendors that supply goods that are getting more difficult to receive as the global supply chain issues continue.
Automate Your Accounts Payable Processes to Keep Things Organized
Organizations who automate their AP workflow speed up invoice processing and ensure vendors get paid accurately and on-time. The old fashioned, manual invoice process can present challenges to staff and cause delays in the entire payment process. Implementing automation practices for accepting and storing invoices can help improve company exposure and efficiency.
With an automated accounts payable process, vendors will be paid accurately and on time. This secures healthy vendor relationships and a future supply chain. Businesses can also identify tactics to further support cost savings and efficiency in the pay cycle by leveraging the data in the AP automation solution.
Accuracy is vital to any business operation, especially your cash flow. Most importantly, make a good practice of updating your accounts every day with an automated account payables process within your accounting software.
Electronic Payments to Vendors with ACH
Initiating electronic payments with e-payment solutions such as Automated Clearing House (ACH) provides lower overhead costs for the company as a whole. It also provides better security. Likewise, automatic and electronic debits and credits greatly improves the accuracy of your books. This is achieved by limiting the number of people who come into contact with your information.
Centralize Accounts Payable Processing and Financial Reporting
Centralizing accounts payable processing and financial reporting across the enterprise through a shared environment like Salesforce can streamline workflows. It can also reinforce quality accounting practices. Above all, this enables your team to accomplish more in a quicker time frame and with fewer resources. This ultimately reduces costs and saves the company money, and keeps vendor payment management streamlined and efficient.
Systemize Accounting and Reporting Processes
Before you can actively manage payables, you need assurance that your accounting reports are up-to-date. You also need to check that your financial records fairly reflect current accounts payable balances. Without this data, many businesses lack insight into the amount and the timeliness of when they pay their suppliers.
Improving real-time reporting capabilities by automating reconciliations and ensuring they remain current strengthen your accounting and reporting process. Reach out to our team today to learn more. If you have any questions on how to improve your accounts payable process, check out our FAQs section or request a demo of our automated online accounting software.
For more accounting resources for your business, read on:
- Top 7 Issues Accountants Face Today
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- DCAA Compliant Accounting Software: What to Look For
- What Are the International Accounting Standards (IAS)?
- Top 8 Reasons Why IT Implementations Fail
- What is Cash Disbursement in Accounting?
- Accrued Expenses: What Are They And How to Report Them?
- Intro to Accounts Payable and Purchase Order Accounting
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