7 Best Practices That Impact Accounts Payable Automation
All around the world, mistakes happen in accounts payable departments every day. And since the AP department governs money leaving the company, that means companies are losing money every day. The good news is that most of these mistakes are preventable if your company implements a best practices policy to govern your AP department. And these policies are even more effective if you’re supporting them with Accounts Payable automation.
1) Scan New Invoices Immediately
Get invoice processing off to a good start by entering new invoices into the system the same day they arrive. This ensures you won’t lose incoming invoices and provides more accurate insight into an AP department’s current workload. With a quality AP automation system in place, all you’ll have to do is scan paper invoices. Most digital invoices will enter the system automatically once you get things set up.
2) Centralize Information Management
If you don’t want to lose track of incoming invoices, you need a way to capture and manage all the information in one central location. Invoice receipt, data extraction, and validation shouldn’t be happening in different places. AP automation is a big help with this step. Even if the people in charge of different tasks aren’t physically in the same location, the system still centralizes all AP processing.
3) Store Digital Records
If you’re already scanning paper invoices into the system for processing, your AP automation software should backup and store the information as well. Ideally, you want digital records of all your invoices and their processing history. Digital records are secure, easy to search, and won’t get lost or damaged as easily as paper can be.
4) Define Workflow Rules
Anytime you have multiple employees working together, you need a clear system in place for making sure they’re not working at cross-purposes. Everyone in the AP department should be on the same page about approval deadlines, policies for handling exceptions, etc. And once you have your rules in place, you can customize AP automation software to your tolerances to help enforce workflow best practices.
5) Manage Vendor Information
You need a single, clean master list that collects all your vendor information in one place. Incomplete, fraudulent, or duplicate vendor information can creep into your system if you don’t have a proper vetting process. And that puts your company at risk for fraud or making inaccurate payments.
6) Offer Supplier Self-Service
Keeping your vendor information up-to-date is easier with the right software. AP Automation Software like APex lets you set up a vendor access portal so your approved vendors can update their own information. A supplier self-service portal also lets vendor check the status of their invoices and find answers to common questions. And that frees-up your AP department because they’re not distracted by so many customer service calls.
7) Sort Out Tax Info
Tax season is hard enough without finding out that you don’t have all the information you need on file already. It’s a good policy to have a W-9 for each vendor before you pay them. That’ll save a lot of hassle when you need to prepare 1099 forms (and help you avoid fines for not complying with 1099 reporting requirements). You’ll also need well-defined procedures for managing sales and use tax.
Implementing best practices policies supports Accounts Payable automation in keeping your accounts payable department running smoothly. Together, your policies and quality AP software improve cash management, save money, and speed up invoices processing. To find out exactly how well Accounts Payable automation can work for your company, get in touch with us to set up a free demo.