How to streamline your Accounts Payable processing

Accounts Payable processing

The current economy is more competitive than ever before. Companies that continue to operate with a “business-as-usual” mindset are going to get left behind. Many organizations already recognize this and are focused on expansion and growth. However, this pursuit is handicapped by one critical process: manual invoice processing. 

As your business grows, you will inevitably need more materials and services in order to serve your customers. The invoices for these purchases will then start piling up on the desks of your accounts payable (AP) team. It falls to them to manually type each data point into your accounting and SAP systems. 

Only after these invoices have been slowly and carefully processed can they be paid and new purchases made. As you can see, when accounts payable processing is done incorrecly, it can halt your entire engine of growth. 

Fortunately, a better path does exist. You can enhance the security and efficiency of your AP processes by following accounts payable organization ideas and implementing an accounts payable internal control checklist. Looking at an accounts payable best practices PDF, you’ll likely find that it is vitally important to be open to utilizing innovative new technologies in your AP department. 

One of the best practices in accounts payable process PDFs is paying your suppliers with accuracy and speed. Automation platforms can dramatically improve the accounts payable management process and lead to greater efficiency. The typical accounts payable process improvement presentation will often mention the delays and inaccuracies that arise as a result of manual invoice processing. 

These errors include:

• Late or lost invoices
• Incorrectly entered data
• Invoices without the required purchase order (PO) numbers
• Difficulties retrieving invoice data for reporting,

If you’re wondering how to more effectively manage accounts payable and receivable, an automated data extraction tool may be able to help. The single best example of a tool like this is Rossum. 

With Rossum, your team could dramatically reduce the time it takes to process invoices. Imagine simply uploading invoices in bulk and automatically processing them with just a few clicks. This can eliminate those mountains of paperwork and make it easier for your business to grow.

Accounts Payable guidelines

If you’re wondering how to manage accounts payable and receivable, there are a few general accounts payable guidelines to keep in mind as you work on improving your processes. The first is that speed and quality are vitally important. No supplier likes having to wait to get their money, but even more, significant problems can arise if they are never paid or paid an incorrect amount. 

On the other hand, prompt, accurate payments can result in a stronger relationship between you and your supplier, which can even lead to special deals down the line. The problem is that getting this kind of speed and accuracy can be challenging when all your invoices are processed by hand. This is especially true for larger enterprises and growing organizations that may need to process hundreds or even thousands of documents.

True process improvement requires you to take an honest look at your accounts payable strengths and weaknesses. Are your processes secure? Are they accurate? Are they consistent? These are the kinds of accounts payable questions you should be asking yourself. 

Once you have created solid processes throughout your AP department and have taken advantage of powerful automation software, it is also recommended that you create an accounts payable training manual so that all new employees can quickly get up to speed with how you manage your accounts payable department. 

Accounts Payable process SAP

Here is a list of the steps that make up the accounts payable process SAP:

1. Receive invoice from vendor
2. Verify data on the invoice
3. Update record of invoices
4. Make payment within the due date
5. Close ledger account for the transaction.

Each of these steps needs to be completed efficiently and accurately for your business to grow successfully. To help facilitate this, many companies do accounts payable configuration in SAP S4 HANA. 

SAP S/4HANA is an accounting system with many automation features to make the entire accounts payable cycle faster. Learning the software is easy as you can simply go online and find an SAP accounts payable course. Plus, when you do accounts payable in SAP S4 HANA, you also will get all kinds of reports and analytics that you can use to continuously improve your systems and processes. 

However, there is one limitation with running your accounts payable invoice processing in SAP. Most invoices arrive at businesses in PDF or paper formats. This means that the invoice data you need is unstructured. 

What you may notice when looking at an accounts payable process in SAP PDF is that these formats are not compatible with most accounting software. SAP S/4HANA and many other similar platforms can speed up many of the accounts payable process steps once the data is converted into a structured format such as an Excel spreadsheet. 

You may also find this limitation noted in the accounts receivable process PDF or accounts receivable process in SAP PDF. That’s why you need robust data extraction software, even if you already have a comprehensive accounting system. 

Accounts Payable process PDF

Learning is an essential part of adaptation and growth. Fortunately, the Web is full of free downloads and resources that can help you learn more about how you can improve these processes. 

An accounts payable process PDF can help to illuminate the overall cycle that businesses rely on to purchase supplies from vendors. You will often find the accounts payable process steps that we have described above. In any accounts payable textbook PDF, you will also find a broader explanation of how these processes and steps are connected to the overall success of your business. 

Additionally, you have your accounts receivable (AR) department. As with accounts payable, it is easy to find an accounts receivable PDF with guidance on managing and improving your AR processes. An accounts receivables process PDF will often include all kinds of recommendations such as “be proactive in your collections” or “offer a payment plan.” 

For more detailed information, you could also go out and review a sample accounts payable policy and procedures manual or a vendor payment policy and procedures document. Reviewing these kinds of documents can be a great way to brush up on the fundamentals and learn newer more efficient ways to reach your goals. 

P2P process in Accounts Payable

The P2P process in accounts payable is a way of looking at the accounts payable process. P2P is short for procure-to-pay. In any procure-to-pay best practices document or procure-to-pay process example, you’ll find a list similar to the one we reproduce here:

1. Identify a need
2. Make a request for goods or services
3. Send a purchase order to the vendor
4. Receive the Goods Receipt from the vendor
5. Receive invoice from vendor
6. Process invoice
7. Pay Invoice.

As you can see from this list of steps, accounts payable is all about meeting the needs of the business. This is why efficiency in the processing of invoices is not just a “nice to have.” On the contrary, it is mission-critical. 

The costs associated with inefficiencies in the AP process can add up to huge amounts over time. Furthermore, manual invoice processing is a highly unrewarding task that can lead to a discontent workforce. 

A truly insightful procure-to pay process PDF will do more than just explain the cycle. It should also demonstrate how to improve it. If you find a procure to pay process PPT that shows how the procure to pay process SAP works, look to see if it has any guidance. For example, it might recommend you use an AI-enabled optical character recognition software (OCR) to dramatically improve document processing times. 

Accounts Payable examples

Another way to improve your understanding of the accounts payable process is to look at accounts payable examples. Understanding how other companies process invoices and pay suppliers may give you ideas for how you can make your processes more efficient. The best accounts payable and receivable examples effectively demonstrate how software can allow you to do more with less. 

The accounts payable department is responsible for paying vendors as quickly and as accurately as possible. A manager of an AP department should fully comprehend the accounts payable formula. This formula allows you to calculate the number of days that a payable invoice remains unpaid. This is called turnover. 

The goal of your organization is to keep turnover as low as possible. Many people wonder what is accounts payable on a balance sheet. In this context, they also wonder, is accounts payable a liability or an expense? 

Simply put, on a balance sheet, accounts payable are always listed as a liability to creditors rather than an expense because it is money owed that has not yet been paid out. This should answer the question, “what is accounts payable process?” when it comes to balance sheets. 

Accounts Payable procedures manual

Free samples of an accounts payable procedures manual can often be found online from a variety of reputable sources, including universities and process improvement organizations. These accounts payable procedures manual PDF downloads allow you to take a deep dive into the specifics of managing the accounts payable process. These documents describe in detail the accounts payable policies and procedures you can use in your organization. 

You may also see the accounts payable procedures flowchart showing the overall structure of the department. Accounts payable policy covers all aspects of the AP department, from keeping track of payments to invoice matching and document processing. 

Rossum is a data extraction solution that can dramatically improve the efficiency of your accounts payable processes. Plus, you can extract data and process invoices with confidence with our highly secure platform that complies with several of the most stringent compliance standards.