7 Best Practices That Impact Accounts Payable Automation
All around the world, mistakes happen in accounts payable departments every day. And since accounts payable handles money leaving the company, those mistakes mean that companies are losing money every day.
While a few mistakes are understandable, the costs can add up quickly if an AP department doesn’t take steps to stop problems from happening. In some more extreme cases, issues that arise within accounts payable actually have the potential to sink your company.
The good news is that you can prevent most problems of this sort by implementing a best practices policy to govern your AP department. In this article, we’ll look at seven best practices that will help your company prevent costly mistakes.
Another thing we’ll look at is how best practices policies impact AP automation. As more and more companies go digital, automation is an essential consideration when implementing new and improved policies. Fortunately, these best practice policies are going to be most effective if you’re supporting them with accounts payable automation.
1) Enter 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 accounts payable department’s current workload.
With a quality AP automation system in place, the only manual task you’ll have to do to support this best practice is scan paper invoices. Most digital invoices will enter the system automatically once you get things set up. And if you don’t want to scan the invoices yourself, you can outsource it to NextProces. We offer same-day turnaround on our document scanning.
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.
Accounts payable 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. This makes it much easier to enforce company policies and streamline accounts payable processing.
3) Store Digital Records
Paper records take up large amounts of storage space. It’s often difficult and/or time-consuming to find information stored on paper files. Plus, a fire or a water leak can destroy years worth of files very quickly. You’re going to 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.
If you’re already scanning paper invoices into the system for processing, your AP automation software should back-up and store the information as well. You can also scan old paper files into the system as well so you can easily manage all your records. Our document imaging service can help with that if you’d rather outsource file scanning than handle it in-house.
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.
It’s important that you clearly define workflow rules as part of your best practices policy. And once you have your rules in place, you can customize accounts payable automation software 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.
Keeping your vendor information up-to-date is easier with the right accounts payable automation software. These systems include tools to make managing vendor information very simple.
6) Offer Supplier Self-Service
You don’t want your accounts payable department to get bogged-down in handling customer service for your vendors and suppliers. But you also want to maintain good relationships with them.
A system like NextProcess lets you set up a vendor access portal so your approved vendors can update their own information. This self-service portal also lets vendors and suppliers 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.
Automating helps with both taxes and audits by supporting accounts payable best practices. The system makes all the information you need for taxes easy to access. Plus, the automation system helps ensure accurate information so there’s less risk of delays or other issues caused by finding some kind of problem in your records.
Implementing best practices policies supports accounts payable automation in keeping your AP department running smoothly. Together, your policies and quality automation software improve cash management, save money, and speed up invoices processing. They’re also going to help you fight fraud, improve vendor relationships, and make taxes and audits easier to deal with.
Of course, to get the most benefits from accounts payable automation best practices you need a high-quality software system. NextProcess’ AP Automation Software fits that description. We offer a reliable, user-friendly software system that is easy to customize to your company’s specific needs.
We also back up our software with customer service you can count on. NextProcess will be right there with you every step of the implementation process to make sure your software is set up and working just how you like it. We’ll also keep the system up-to-date for you and we’ll be happy to answer any questions you might have.
To find out exactly how well AP software can work for your company, get in touch with us. We’ll set up up a free demo so you can see first-hand what a difference accounts payable automation can make for your company.