August 8, 2022

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Easy Tricks to Fortify Your Warehouse Industry

Many businesses prioritize accounts receivable (AR) due to the fact that AR is an income-generating...

Many businesses prioritize accounts receivable (AR) due to the fact that AR is an income-generating activity. It’s also important, however, not to overlook accounts payable (AP), and potentially use automation due to the critical role it plays in your business.

Accounts payable, when managed and tracked correctly, allows your company to more accurately forecast and track your cash flows. This type of forecasting can be invaluable when making business decisions a few quarters in the future. This is especially true if there is an unexpected event your company must react to quickly.

Additionally, your accounts payable can influence your company’s credit score, impacting your ability to secure loans when you need to grow your business or invest in capital expenditures.

In this guide, we’re going to walk through several ways your business can quickly and efficiently improve your accounts payable process.

1. Use AP Automation Software

Is your company still working through your accounts payable workflows manually? If so, using AP automation software in your business can improve your efficiency exponentially.

By automating your accounts payable process, you’ll be able to reduce delays and bottlenecks within your business.

Think of when approvals for invoices are required. Typically, an invoice would sit in an email inbox or on a desk until the appropriate person gave their approval. With automation, all of those delays will be eliminated by ensuring that each invoice is sent to the appropriate person directly and having automatic follow-ups to ensure everything is approved in time.

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You’ll also improve the accuracy of your AP Workflows, and reduce the chance of human error. By automating certain aspects of your AP process, you’ll be able to automatically run your invoices through verification checks built into the accounts payable software. Then, remove the need for manual data entry and the chance of typos making their way through the system.

Finally, using automation in your accounts receivable workflows provides you with detailed insights and data, allowing your company to make actionable business decisions based on data you wouldn’t have otherwise had.

All in all, using automation software is how your business gets to the next level in terms of AP efficiency and productivity.

2. Transition to a Paperless Environment

Even though physical paper can be comfortable when it comes to important records, embracing the digital revolution and going paperless is how companies are able to significantly improve their accounts payable team’s productivity.

Nowadays, going digital is safe and secure when the appropriate tools and security measures are implemented, allowing your business to have peace of mind when starting the transition.

The “digital paper trail” created by having all of your supplier or vendor communications in one location is also invaluable, as it allows you to quickly reference any part of a transaction and understand exactly what was happening at each point in the process.

If you’d like to improve your accounts payable process today, consider going paperless and using AP automation software in order to help you make your workflows more efficient in the long run.

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3. Strengthen Your AP Approval Process

AP approvals can be significant bottlenecks within an organization, often resulting in delays and missed approval deadlines. What if you could strengthen your AP approval process by utilizing software that is specifically designed to automate the process, and provide automatic reminders of critical approvals that must be made?

Don’t allow your business to be bottlenecked by your approval process – if you embrace moving your AP process into the “cloud” and using software and tools specifically designed for improved approvals, you’ll be able to save significant time and money by having all of your approvals come through with no delays.

4. Create Management Workflows

Your business can enhance the efficiency of all of your accounts payable processes by creating management workflows. When you create a specific workflow that your AP department follows and must stick to, you can easily identify all of the bottlenecks and inefficiencies in the process.

When you streamline your accounts payable process through a management workflow, you’ll be able to improve liquidity management in an effective way, and allow your teams to work to their full capacity.

5. Centralize Your AP Reporting & Processing

Having all of your AP reporting and processing in one central location is important if you wish to improve your accounts payable efficiency. Using AP Automation Software is a great way to do this, as all of your documents, invoices, and relevant data will be linked together and quickly accessible without any delays.

In a shared service environment, your staff will be held accountable to your processes and standards, as these are typically programmable and adjustable within a digital environment. Your business will ultimately be able to accomplish more in a faster time frame and use fewer resources than you would have otherwise.

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The long-run effect of centralizing all of your AP reporting and processing is a reduction in costs and potentially increased profitability. When it comes to making your business more efficient, this type of centralization is a change that can make a significant impact over time.

The key takeaway here is that AP Automation software is a great place to start, but there are other options to help improve your accounts payable process. Have a team meeting over coffee and bagels and take a few minutes to learn which options will benefit your business the most.