Expert accounts payable outsourcing services can help businesses streamline and optimize their processes. Accounts payable can be challenging, indeed. Process inefficiencies and a lack of appropriate in-house expertise can compromise your payment tracking, disbursements, and even vendor relationships.
Many business owners, CFOs, and finance managers prefer to outsource this function for these reasons, therefore.
If you are also considering or embarking on this pathway, we bring here some crucial insights into the how’s and what’s of high-performing outsourced payables function.
How Payable Services Elevate Vendor Invoice Processing and Payments
Hiring an experienced services provider firm unlocks a pool of accounting experts and AP specialists with a commanding grasp on invoice and bill processing best practices and compliance.
A multifaceted resource pool also means deftness in multiple payable software and related technologies. And generally, there aren’t any issues working with your current system or software of choice.
You can expect a competent account payable outsourcing services to ensure:
- Purchase Order (PO) verification
- Faster vendor/supplier invoice processing
- High payment accuracy; lesser reworks
- Efficient tracking, reminders, and reconciliations
- On-time payouts to vendors and suppliers
- Streamline AP accounting operation costs
Interestingly, outsourcing can be an advantageous move for businesses and organizations of all shapes and sizes.
What Outsourced AP Accountants Do for You
The range of services and solutions offered by accounts payable outsourcing firms varies. However, no two providers are the same.
Differentiation comes with comprehensive suites or selective offerings, standard packages or custom solutions, pricing policies, and online or offshore delivery models. So, choose keeping your exact needs and budget in mind while contracting out.
Some of the things accounts payable services outsourcing can help you with are:
- Vendor/Supplier Administration: Expert vendor onboarding, verification, and coding, along with purchase order tracking, sets the foundation for a seamless payment process.
- Vendor Invoice Management: Providers receive, code, and verify invoices against purchase orders, employing 2-3-way matching to ensure accuracy. Exception invoices are promptly identified and resolved, minimizing delays.
- Supplier Payment Processing: Daily payments and accounts payable transactions are executed with precision, preventing delays and supply chain disruptions. High-volume transactions are handled with ease, ensuring timely payments.
- Harnessing Technology: Modern AP accountants leverage cutting-edge technology to unlock the full potential of account payable software and automation, driving efficiency and reducing errors.
- Trade Credit Data Management: Providers manage data entry and updates, digitize incoming bills and invoices, and store them securely, ensuring easy access and compliance.
- Vendor Account Management: From account opening to closing, providers expertly manage vendor accounts, including month-end and year-end processes.
- Accounts Payables Reporting: Comprehensive reports, including payable aging, cash flow summaries, and forecasting, provide valuable insights, enabling informed decision-making.
Notably, some payable accounting service providers can also manage utility bill and travel charge payments for you. Some businesses may also outsource tax payments, such as sales and VAT or GST, to external services.
However, certain processes, like petty cash management and short-term debt GL entries, are typically handled internally.
10 Core Steps in an Accounts Payable Service Cycle
Below are the major steps that make up a basic accounts payable service cycle, guiding everything from invoice receipt to month-end closing.
- Receive an invoice from the supplier
- Data capture from an invoice or bill
- Identify PO and non-PO invoices
- Invoice entry into the accounting system
- Invoice to PO and receipt matching (if applicable)
- Invoice approval (if necessary)
- Vendor or supplier payment processing
- Post payment in the accounting system
- Update data in the supplier account
- Month-end closing
Outsource Vendor Payments E2E or Selectively
Flexibility is the name of the game! You can outsource payable operations end-to-end (E2E) or delegate selective tasks to take the load off your in-house capacity. Basically, you are building a hybrid accounts payable operation this way.
While E2E delegations are mostly annual contracts, partial outsourcing also allows you to hire services for seasonal needs or on a project basis.
So, you have two explicit advantages at hand:
a) Scale or shrink your process on a need basis
b) Rationalize your payable process expenses
Whether you choose full-cycle payables outsourcing or assign certain tasks, it helps:
- Expedite payment approvals due to improved accuracy and faster turnaround
- Spot duplicity in vendor invoices, resolve discrepancies, and manage exceptions better
- Proactively track pending and aging payables to avoid late payments
- Timely reconciliations of your bank statements and vendor statements. Regular monitoring and timely matching mitigate payment frauds
- Avoid disputes and misunderstandings with your supplier partners, bolstering mutual trust and relations
- Build a good reputation for your business or company. You sure need a solid track record when you go seeking funding, credit, and bank loans
- Above all, manage cash flow better (balancing money in and money out!). This boosts your business’s working capital, liquidity, and bottom line
Seamless Payments + Optimized Payables = Healthy Supplier Relations
Accounting outsourcing is a phenomenon that is growing stronger every day. Companies want to focus on their core business, so many resort to handing over distracting processes that also add overheads to third parties or contractors.
This helps them save time and resources, and optimize costs.
If you believe outsourcing is now a way to go for more effective management of your business accounting and payables function, don’t settle for just anybody.
So, you must:
- Hire an accounting services with expertise in your sector
- Make sure the scope of tasks and KPIs are totally clear to both sides
- Monitor to ensure you’re hitting your goals and a satisfactory ROI
- See to it that the service partners doesn’t slack on AP reporting
In-depth reporting on key metrics like invoice processing time, payment accuracy, reduced DPO, and vendor performance helps measure your payables outsourcing goals against delivery and take timely remedial actions.
For this, regular check-ins and feedback are also important!
Enhancing Your AP Process Efficiencies with Centelli
If you’re looking for a professional firm that works as an extension of your team, we could be your ideal partner. We provide a comprehensive range of finance and accounting services, including accounts payable solutions.
From P2P to reconciliations to reporting and analysis, our AP accountants are sticklers for accuracy and timeliness. We work with a wide range of market-leading accounts payables software.
Partnering with us brings in these benefits (and value!):
- Quick onboarding/smooth transition
- High accounts payables process accuracy
- Timely deliveries and reporting
- Bespoke solutions; 35–65% cost savings
- Global reach; 24X7 Support
Don’t let accounting challenges hold you back. Contact us today for more info about our accounts payable outsourcing services and pricing.
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