Streamline your accounts payable process: 5 tips
The accounts payable process is a critical function in any finance department – ensuring bills are paid, implementing spend control measures, compliance, reducing costs, and maintaining healthy supply chain relationships are just the tip of the iceberg.
To ensure that your accounts payable processes are working efficiently, it pays to regularly review your finance team’s tech stack as there are lots of software solutions out there to help you improve your AP process and reduce manual tasks.
Here are 5 reasons why automation and technology are crucial to helping you achieve your AP goals, and how they can optimise your business processes.
Move your accounting to the cloud for improved processes and data
Combining cloud accounting tools like Xero with an integrated app stack will help you eliminate data silos and will provide a clear picture of company spending and efficient automated workflows.
A carefully selected app stack will save you time and effort, and enable your finance function to focus on the important tasks that bring real value to your business.
Implement OCR tools and switch to digital invoices to cut costs
Using paper invoices in your accounts payable process is costly. When you add together the time costs of processing paper invoices, printing and storage costs, and indirect costs such as manual data entry and correcting data entry errors afterwards, it’s easy to see why paper invoices are a costly, painstaking process.
Instead, switch to digital invoices. OCR tools can scan your invoices and feed the data into the accounting system, paving the way for a paperless invoice approval process. Connect your OCR with an automated approval tool like ApprovalMax, and any invoice that’s added to your accounting system will be sent to the right approver automatically.
Monitor your budgets closely to prevent overspending
To make sure you’re not going to overspend, you can include budget checking in your accounts payable process. Set clear budgets for each expense category and establish a process to monitor them in a way that does not affect team productivity.
In ApprovalMax, invoice approvers see the relevant budgets right next to the invoice on the same screen, which saves them a lot of time and effort, and enhances spend control.
Establish an approval matrix and simplify your processes
As an organisation grows, it’s important to set up a delegation of authority policy to outline detailed authorisation rules. Your approval matrix should specify DFA limits, who’s responsible for approving particular types of expenses, which amounts need to be approved by several stakeholders, and which expenses can be approved automatically.
Thankfully, when you set up an approval matrix in ApprovalMax and delegate authority to the right decision-makers, you always have the option to edit the matrix in the future to add more rules or change decision-makers, if and when required.
Use approval automation to streamline the approval process
Are you managing purchase orders and invoice approvals by email? Maybe you even print them out to get signed approval on paper even though you already have everything in the cloud. As we’ve touched on, manual processes for any part of your approval process can create bottlenecks, and even introduce errors that could land you in a lot of hot water if mistakes are made.
Instead, tools like ApprovalMax can be implemented to save you time and effort each week. Setting up a multi-level approval workflow means your POs or invoices are automatically routed to the appropriate decision-maker. The rules you define in the setup stage will do all the heavy lifting and reduce the amount of thinking you need to do. You can send automated notifications and reminders to approvers to keep invoices moving along. In ApprovalMax, there’s also the option to add steps for budget checking and invoice matching in the approval process, and the added benefit of automated audit trails and fraud detection capabilities.
ApprovalMax is a great app for workflow and eliminating invoices being lost through passing around for approval and email approvals processes. Seamless integration with Xero. Can see an immediate improvement in approval workflow efficiencies and time spent approving invoices.
Xero App Store review by Reece Jory
Final words: Elevating your Accounts Payable process for optimal results
There are several key strategies you can action to take your accounts payable process to the next level. Whether it’s automating repetitive tasks, streamlining communication, or establishing best practices for data entry and document management, these steps can help you save time and reduce errors. By regularly analysing your accounts payable data, you can identify areas for improvement and make data-driven decisions that optimize your process.
By implementing these strategies, you can create an efficient, effective, and organised accounts payable process that will improve your business’s financial health. So why wait? Start taking action today to elevate your accounts payable process and see the benefits for yourself.
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