As a company, if you aren’t looking for ways to improve what you do, you will stagnate and die. Even the smallest of companies should always be looking to push forward.
AP, or accounts payable, is one of the key areas that businesses can and should improve upon. Here are some easy and actionable tips to make your AP process better, faster, and more beneficial to your business.
Keep in mind there are software options like OnPay Solutions that can make the process even quicker.
Simplification
Less is better, so when it comes to your AP, limit them to once or twice a month instead of doing check runs the moment the requests arrive. Since you have specified the check runs, you will have more time to ensure the signatures, invoices, and paperwork all line up.
Prioritization
It might sound simple, but many companies don’t do it. Each invoice should be prioritized by the day the payment is due.
Small businesses on a mission to keep their finances clean will often pay an invoice as soon as it arrives. Instead, it should be processed based on when it is due to don’t impact your cash flow.
Technology
Once the software is set up correctly, it can be faster and more efficient than humans at many of the main processes in accounting.
Haggle
Or, in more refined terms, renegotiate all of the terms for all of your vendors. The usual payment terms will be 30,60, or 90 days – but you can renegotiate the one that fits your business needs best.
If you are on good terms with your vendors, it is easier to have these discussions – however, if you are regularly late with payments, asking to renegotiate isn’t going to work out well.
Verification
While it might be the job of the CFO or other C-suite to sign off on the check, you shouldn't need to bother them beyond that. It takes up the time of all parties, so giving the AP department a good amount of control can make the process faster.
The AP department should be choosing the invoices, document gathering, printing, and the decision on which invoices to pay.
Everything handled by the department in advance leaves the CFO to check the amounts and sign.
Paperless
By removing paper invoices and checks, sending and receiving payments is faster. But it isn’t just that; it can be as simple as looking for a specific amount. Software and digital records can allow you to search through years of records to find the one you need.
Not only that but going paperless also saves cash in the long run and is better for the environment.
And finally, automation of as many time-consuming or repetitive processes is an essential step in boosting your AP.
When it comes to our business finance, a lot can go wrong, but there is always room for improvement. What would your business look like if everything was in order? Business Finance: How To Get Yours In Order.
