Keep your business healthy with Accounts Payable process flow automation

In this post, we’ll provide insights into the importance of Accounts Payable process flow, and offer some practical advice on improving AP efficiency with automated invoice data capture.

Accounts Payable process flow

How Accounts Payable automation can help you create a paperless office

In this post, we’ll explain what eliminating paper can do for your company. You’ll also learn how to kickstart your paperless initiatives with invoice automation and improvements to your Accounts Payable process flow.

Accounts Payable process flow

Companies interested in optimizing their logistics or purchasing capability often ask, “What is accounts payable process currently lacking?” or “How can we improve our accounts payable process flow?” Since there are so many components within the accounts payable process, numerous ways exist to make improvements and optimize workflow.

Your company’s accounts payable process flow will depend on a number of factors. Variables affecting your business’s accounts payable overview may include how many vendors your organization works with, how many purchase orders your company places on a regular basis, and the types of documents your company and your vendors require with regard to receipts and invoices. 

With so many documents exchanging hands, it’s not difficult to imagine an invoice getting lost or shuffled into the wrong stack. Rossum provides intelligent document processing to assist in complex systems like accounts payable

Reducing repetitive manual data entry not only decreases the likelihood of human error, but it can also help reduce accounting costs and afford your accounts payable team the resources they need to get your business to the next level. By focusing on more value-added tasks, employees can help the company grow revenue and increase customer satisfaction. 

There are so many intricate steps and procedures within the accounts payable process.  Businesses that prioritize the organization and efficiency of their accounts payable workflow are less likely to be susceptible to fraud or shrinkage. They are also more likely to report higher employee productivity and satisfaction levels. This efficiency can be increased by learning from some of the best accounts payable examples. 

Making a shift away from manual data entry in accounts payable could be the change your organization needs in order to expand, or begin taking on more vendors and clients. If your company is still relying on manual data entry to keep systems organized and running smoothly, you are not using your resources as efficiently as you could be, and your accounts payable team is spending time doing work that invoice data capture could do for you. 

End-to-end accounting process

The end-to-end accounting process involves several steps designed to see the operation from its inception to fruition. Some sources say there are five essential steps, some sources identify seven or eight, and the number of steps that work for your organization may not work for other companies. The steps are: 

  • Identification stage
  • Transaction recording
  • Posting
  • Calculating the unadjusted trial balance
  • Analysis
  • Troubleshooting
  • Producing statements
  • Closing the books.

Each of these steps requires care and attention to ensure that the overall process flows seamlessly and swiftly – to ensure deliveries are made on time, and that your organization continues operating smoothly. But how would you balance accuracy and efficiency in accounts payable processes?  

Widely accepted accounting principles (GAAP) accounts payable procedures necessitate adherence to a set of rules and standards devised by the Financial Accounting Standards Board (FASB). Sticking to these guiding principles can preserve the integrity and efficiency of your accounts payable team’s accounting process.

An accounts payable end-to-end process in SAP (systems, applications, and products) works to ensure that each step of the process is as simple as possible. Ideally, your company wants to reduce the chances of mistakes happening while simultaneously liberating or empowering your accounts payable team to thrive in their positions. Employee satisfaction is an important part of company success as high retention rates negatively impact the bottom line and company culture.

Accounts Payable guidelines

Developing a rigorous and sensible set of accounts payable guidelines to help your company thrive will likely require data collection, internal research, and a firm understanding of your current accounts payable strengths and weaknesses

What accounts payable questions can you pose to your team in order to gather more information about how you can improve the overall process? And how can you translate your accounts payable team’s feedback into meaningful improvements for your company? 

An organization that handles dozens or hundreds of different vendors might, for instance, devise a set of guidelines that encourages the accounts payable team to minimize your business’s average invoice processing time. Even a modest improvement in invoice processing can reduce costs or penalties your company incurs, and it can also improve existing relationships with frequent vendors. 

If your company receives both paper and electronic invoices, your accounts payable team might consider adopting guidelines geared toward digitizing paper invoices to improve and centralize your record keeping. 

Prioritizing efficiency in your accounts payable process can potentially have beneficial effects throughout the rest of your organization, too:

  • Improved delivery and receiving logistics
  • Cost savings (paying fewer late fees, spending less time on redundancies)
  • Improved intercompany relationships between departments
  • Greater brand recognition and brand perception.

Accounts Payable end-to-end process flow PPT

The accounts payable process is complex and multifaceted, but it’s not unnavigable. Even if your business is smaller or a mid-market entity, preserving a scrupulous end-to-end process flow can help your organization stand out from your direct competitors. When you take steps to streamline your accounts payable processes, the rest of your company can see those benefits as well – including accounts receivable. 

But what is the difference between accounts receivable vs payable? Essentially, accounts payable is responsible for handling the money your organization owes external entities. And the accounts receivable team manages the money that is owed to your organization. When both facets of your business are operating efficiently and accurately, it can strengthen the rest of your company as well.

A detailed ledger of procurement journal entries can help your accounts payable team stay organized, especially if your organization regularly works with lots of vendors. Keeping a detailed log of all purchase order (PO) accounting entries is another way to maintain organization and reduce the chances of fraud or missing an invoice. Less time spent tracking down missing documents or thwarting fraud means more time for your team to be on-task and productive.

Best practices in Accounts Payable process

If you are wondering how to organize accounts payable invoices, it may be time to look at a sample accounts payable policy and procedures manual. The best practices in accounts payable process involve maintaining a highly organized and efficient operation from start to finish without cutting corners. 

One method to help sustain such high standards is implementing an accounts payable internal control checklist. Other accounts payable organization ideas might include updating or revamping your company’s accounts payable process steps or providing employees with an accounts payable process improvement presentation. Other best practices include:

  • Expedite invoice approval
  • Utilize a P2P portal or automated data extraction system
  • Eliminate or reduce duplicate and late payments
  • Develop a streamlined workflow that works for your organization.

This list is certainly not exhaustive, but perhaps it provides you with some ideas about areas where your company could improve its systems and workflow. What are some of the best practices of your closest competitors? What are some of the areas they succeed in and how can your organization replicate their success?

However your company decides to overhaul its accounts payable processes, the steps you take ought to improve or eliminate your weaknesses and enhance your strengths. It’s important to understand what your proficiencies and limitations are from the onset so that any changes you make don’t upset the processes that are already working well. 

P2P process in Accounts Payable

The procure-to-pay (P2P) process in accounts payable incorporates a coalescence of purchasing and accounts payable operations in order to improve workflow and minimize the possibility of errors and mistakes. Procure-to-pay best practices will vary from company to company based on your industry and overall purpose. 

If your business can switch to paperless placement orders and invoices, you could implement a P2P portal to help your accounts payable team organize and analyze your operations. This can be difficult, however, since many vendors still work with paper invoices. Rossum can automate business communications via intelligent document processing – saving your accounts payable team time, money, and headaches.

Accounts Payable procedures manual

Providing a detailed and well-researched accounts payable procedures manual for your team can help optimize your present accounts payable process, but it can also be beneficial if your organization is looking to expand operations. An informative manual can also benefit new hires and help ameliorate your training and onboarding systems. 

Your company’s accounts payable policies and procedures can also include (or allude to) specific vendor payment policy and procedures – especially if there are one or more vendors with whom your organization frequently does business. This can also be helpful if certain vendors still send paper invoices, or if their invoices have a unique format that differs from the invoices your team normally processes.

If your organization already has an adequate accounts payable manual (PDF), you may consider reviewing the document to update your accounts payable policy or to include more information and graphics like an accounts payable procedures flowchart. Maintaining your company’s instructional documents and literature is a practical and cost-effective way to improve your accounts payable processes and many other internal affairs within your organization.

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