5 Effective Ways to Streamline Accounts Payable with Ease

Home Blog Five ways to streamline your accounts payable process

Accounts Payable

Five ways to streamline your accounts payable process

By ApprovalMax

10 min read •

January 14, 2022

Managing accounts payable can feel like a never-ending balancing act – keeping up with invoices, approvals, and deadlines while making sure everything runs smoothly. But how do you streamline accounts payable without sacrificing accuracy or control? With the right strategies and tools, it’s easier than you think.

In this guide, we’ll walk you through five practical steps to simplify your accounts payable process and create a system that works for you.

How to streamline accounts payable?

Here are some simple to make your accounts payable process more efficient:

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.

Picture this: Your finance team is juggling multiple spreadsheets to reconcile payments, wasting hours cross-checking data. By switching to Xero and using tools like ApprovalMax, you now have a centralised platform. Your team logs in, sees all pending invoices, and tracks approvals in real-time. No more back-and-forth emails or mismatched entries – just one source of truth for all AP data.

Use 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 and any invoice that’s added to your accounting system will be sent to the right approver automatically.

Imagine your team receives 100 invoices a week, each requiring manual entry. With an OCR tool, the system automatically scans the invoices and extracts key data – vendor name, invoice number, and total amount – and sends it directly to your accounting software, without you needing to lift a finger. This not only cuts down on processing time but also minimises errors, like a mistyped number that could delay payment.

Monitor your budgets closely to prevent overspending

Consider including budget checking in your accounts payable process to prevent overspending. Set clear budgets for each expense category and establish a process to monitor them in a way that does not affect team productivity.

Use tools that show budget balances alongside invoices. This lets approvers quickly check there’s enough budget left before signing off, avoiding unnecessary back-and-forth.

Set up 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.

An approval matrix clarifies who needs to approve what and under what conditions. For example, expenses under $1,000 might only require a department manager’s approval, while larger amounts might need sign-off from a director or CFO. This structure speeds up approvals and ensures that everyone follows the same rules.

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.

ApprovalMax can 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 to take your accounts payable process to the next level. Whether it’s automating repetitive tasks, streamlining communication, or setting up 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 optimise your process. So why wait? Start taking action today to elevate your accounts payable process and see the benefits for yourself.

FAQ

What would you like to know
about ApprovalMax?

Unlock end-to-end accounts payable and receivable automation to enhance the way you use Xero.

How to streamline accounts payable

Streamlining accounts payable means improving the efficiency, accuracy, and visibility of your AP processes. This can involve digitising invoices, automating approvals, integrating accounting software, and adopting tools that reduce manual work and errors.

What tools are most effective for streamlining AP?

Some of the most effective tools include:

Cloud-based accounting platforms like Xero or QuickBooks Online
OCR software for digitising and automating invoice data
Approval workflow tools to automate routing and approvals like ApprovalMax
Budget tracking features for real-time expense monitoring

How does streamlining AP reduce the risk of fraud?

Streamlining AP with automation creates clear audit trails, ensures proper segregation of duties, and flags duplicate invoices or unusual activities. This transparency minimises the risk of fraud and strengthens financial controls.

How can I measure the success of streamlining my accounts payable process?

You can measure success by tracking key performance indicators (KPIs), such as:

Time saved in processing invoices
Reduction in manual errors
Cost savings in processing invoices
Improved on-time payment rates
Feedback from your AP team and vendors

Approvalmax is an all-in-one B2B software platform used by businesses around the world to build robust AP and AR automation, creating multiple layers of internal control. It streamlines the approval process by allowing users to create automated workflows to approve bills and invoices. ApprovalMax integrates with accounting platforms such as Xero, QuickBooks Online, and Oracle NetSuite to unlock powerful efficiencies for accounts payable and accounts receivable functions in any finance team.