If you want your business to be successful, you need to take a closer look at your internal processes. This might not be the most exciting thing in the world, but paying attention to the details can give you an opportunity to stay one step ahead of your competitors. That means taking a closer look at your accounts payable. What do you need to do if you want to get the most out of this internal process? Take a look at a few important best practices below, and remember to take a look at your daily operations from time to time to see where you can improve.
Time is your most valuable resource. This includes not only your time but also the time your employees have to spend dealing with your accounts payable. You need to free up your employees to focus on tasks that are more important, and that is why you should try to invest in accounts payable automation when you can. If you can automate your invoices, you will have an easier time getting your bills paid quickly. As a result, you can keep your suppliers happy, which can help you succeed in a challenging environment.
You need to audit your process from time to time to identify areas of redundancy. Then, you need to simplify and streamline your workflow when you can. For example, you may want to reduce the number of check runs. Or, you may want to consolidate all of your information into a central repository. You do not want to go overboard with your check runs, and you must make sure that all of your invoices have matching paperwork as well as approval signatures. If you can reduce the number of steps, you reduce the number of mistakes that are made, and you increase your on-time rate.
Another reason why a lot of companies have issues with their accounts payable is that there are too many cooks in the kitchen. Everyone has a job to do, and you must make sure everyone does that job and only that job. This means you should try to limit access to your accounts payable process, making sure that people only have access to this area if they need it to do their jobs. Then, make sure everyone understands exactly what their task is, and silo all information accordingly.
It should go without saying that you must make sure you keep track of your records; however, you need to think carefully about how you organize them. You may want to invest in a software program that can help you keep everything straight. For example, you might be interested in a software program that can keep images of all your invoices. Then, make sure you pair your invoices with the necessary paperwork, as you may need them come tax time. There may be opportunities for you to save money on your taxes if you keep salad records of your overhead expenses.
If you find you are falling behind, you may want to reach out to your vendors to renegotiate payment terms. For example, they may be willing to give you an extra few weeks to pay your bills. Or, you may be able to consolidate your payments, paying multiple bills at the same time. This could reduce the number of times you have to go through the process, which could free up your employees and managers to focus on other areas of the company.
Finally, if you want to reduce the number of mistakes that are made, you must make sure you prioritize communication. This includes not only employee communication but also supplier communication. For example, you may want to set up a supplier portal that you can use to communicate more effectively with your suppliers. That way, you reduce the number of phone calls that are made, and you ensure your vendors have access to all the information they need. This could keep your vendors happy, which might give you leverage you can use to negotiate more favorable payment terms down the road.
Ultimately, these are a few key tips you need to follow if you want to get the most out of your account payable. You must make sure your bills are paid on time and audit this process from time to time to make sure that happens. You may also want to consider reaching out to an expert who can help you evaluate this process and identify areas for improvement. That way, you can keep everyone happy, and you can position your business for the future.