Every business has to make numerous investments throughout the year to keep operations running smoothly. When vendors and suppliers send you invoices, it’s crucial to have an easy way to manage all documentation correctly. Failing to do so can lead to late payments, extra fees, and tarnished vendor relationships.
The challenges accounts payable (AP) departments face aren’t getting any easier to tackle. These days, even small businesses routinely outsource work and buy products and services from abroad, and working with multiple currencies and invoicing standards is often part of the routine. To better manage your accounts and reduce expenses, you should follow these steps:
#1. Go paperless whenever possible
Relying on paper documents isn’t just bad for the environment, it’s also bad for finance. Paper documents are easily misplaced, and physically exchanging them is a tedious chore.
Online billing helps you reduce the risk of mislaid documents and late payments, and they let you maintain a complete audit trail of your transactions. Online invoices can also be automatically imported into your accounting platform so they can be approved and paid quickly.
What’s more, you should have a process for scanning in all paper-based documents so you have everything in the same place. Be sure to set up online payments for your regular vendors to save time, too.
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#2. Standardize your workflow processes
AP departments often find themselves facing an overwhelming and complex array of systems and processes. This results in multiple data entry routines, which, in turn, can lead to inconsistent and incorrect information. If everything is kept in different locations and accounting systems, it will just be a matter of time before problems arise.
To make AP processes simpler, you should standardize your workflow and eliminate the need for using any more platforms and processes than are absolutely necessary. You can also use an accounts payable aging report to manage your invoicing due dates and prevent costly fees resulting from late payments.
#3. Keep an accurate and up-to-date archive
Keeping an up-to-date archive of your invoices and other business documents might feel like more work, but it will undoubtedly pay off in the end. If you don’t have a complete audit trail of every transaction, you won’t have much recourse in the event of a payment dispute, and things will be a lot harder when you need to declare business expenses come tax time.
Every AP department should have a centralized repository, preferably a cloud-enabled one, where they keep a complete archive of their data. Saving these kinds of documents won’t only make life easier later on, it’s also essential for compliance.
#4. Maintain strong vendor relationships
Poor accounting practices are among the most common reasons for bad vendor relationships. After all, no one likes receiving late payments or, worse, not receiving them at all. However, if you’re still relying on arcane accounting processes with lots of unnecessary red tape, then it won’t be easy to maintain stronger vendor relationships.
Vendor relationship management is one of the most important (yet undervalued) components of running an efficient AP department. By automating routine payments and onboarding steps for new vendors, you can reduce the risk of human error and potentially open up opportunities for getting better deals.
#5. Be proactive when organizing your accounts
When you’re managing hundreds or even thousands of invoices from a constantly growing portfolio of suppliers, it’s easy to forget about payments or let invoices slip by your attention. If that happens, there might be various steps you can take to remediate, but chances are the damage will already have been done.
Taking a proactive approach helps you prevent and better prepare for such situations. For example, most accounting systems allow you to set up automatic reminders to keep you informed about upcoming payments. They also help you anticipate expenses.
PaperSave helps you take control of your AP processes with integrated document management and automation. Call us today or schedule a free personalized demo to fully experience the benefits PaperSave brings to your business.