Are you losing your key suppliers due to an inadequate tracking system of recording the due dates for payments? Do you find that you are not able to avail the benefits offered by suppliers in terms of discounts offered for early payment?
If these are regular problems faced by you, then you certainly need to review your accounts payable system. Accounts payable is an integral part of your working capital, and failure to address these issues could result in constant cash flow problems. With poor relationships with suppliers, your production and profits will be hit badly. You need to take action right away.
Manual systems of keeping accounts payable records in case of an expanding business will result in missing supplier payment deadlines, supplier discounts, missing out on keeping a tab on the quality of supplies, and eventually a financial crisis for the company.
How can Accounts Payable be Optimized?
Here are some of the ways in which the accounts payable process can be optimized.
Preparing a Core Strategy
You need to decide the frequency of payments to suppliers, including the mode of payment, keeping in mind the due dates.
The accounts payable system should include the approval process as well. Discounts offered by vendors and maintaining proper relationships with long-term vendors should be taken into account.
The system should be integrated with the MIS reporting of the company so that critical decisions can be taken by management.
The responsibility of monitoring accounts payable should be given to a key decision-maker in your management team. Since the management team is accountable for ensuring that there are no lost opportunities in terms of competitive credit terms, they will keep track of vendor payment schedules.
The strategy for accounts payable should be adhered to by the managers to realize the optimal benefits.
Accounts payable analysis should be part of the main agenda of business meetings, and there should be smooth access to the computer network from any geographical location with mobile devices.
Having a centralized vendor portal which links your inventory network to your key suppliers makes monitoring bulk purchases easier. Negotiating the best price with your vendors with the right accounts payable process in place becomes seamless and smooth.
Your suppliers can access the inventory supplied by them, resupply if required and receive payments in an automated way.
Suppliers receive their dues on time, and you never have inventory shortages with a proper system.
Minimize Errors and Fraud
An efficient accounts payable system ensures that there are no losses on account of fraud or errors. Losses due to such errors run into billions of dollars.
With automation, detection of fraud and accounting errors is easier.
There should be more than one authorized signatory when it comes to sanctioning payments made to suppliers. Automation also ensures that payments are routed through a secure payment network which prevents access to your company’s financial information.
Your accounts payable should also be audited at regular intervals for assessing the effectiveness of your accounts payable and rectifying any errors at an early stage.
Get Professional Help for Your Accounts Payable
If you want to focus on your business revenues and fresh client acquisition for higher profits, then let professional firms manage your accounts payable system. At OHI we have several years of experience in managing accounts payable processes across industries. We have handled end to end AP processes (Procure to Pay Cycle) including PO creation, Invoice processing, Vendor Reconciliation, AP Reporting and AP Disbursements
You won’t need to invest heavily in staffing, as we (OHI) will take care of the entire accounts payable process starting from tracking supplies to ensuring timely payment of suppliers. You will enjoy the benefits of a smooth flow of inventory and supplier discounts.
We can maintain all accounts payable requirements relating to the audit. AT OHI we have experience in different software like QuickBooks, Yardi, Appfolio, NetSuite and Xero. OHI has clients across various sectors like real estate, construction, IT, logistics & transportation and retail sectors. Most of our operational team has at-least four years of accounts payable outsourcing experience.
So, find accounting and finance firms which can provide several client references and find one that suits your budget. With the right firm, your business will grow to the next level, and your profits will soar.
OHI is a specialized finance and accounting outsourcing service provider since 2006, providing skilled and experienced accounts payable specialists at economical rates. High expertise in QuickBooks, Xero, NetSute, Yardi (Genesis and Voyager), AppFolio, Timberline and Microsoft Dynamics. Our services are used by 300+ businesses across sectors like real estate, construction, logistics & transportation, retail, manufacturing, IT firms and CPA firms.
We invite you to experience finance and accounting outsourcing through us. Contact us to develop a customized accounts payable process manual suited for your needs and business requirements.