Accounts Payable Outsourcing Services
Your data is treated with the utmost discretion and is safeguarded against unauthorized access and disruptions. This includes matching invoices to purchase orders, confirming receipt of products or services, and ensuring proper authorization before processing payments. Accounts payable is the money a company owes its vendors, while accounts receivable is the money that is owed to the company, typically by customers.
- BILL customers reported saving, on average, 50% of their time spent on AP.
- Use of ARDEM Cloud Platforms bring Technology for further business process improvement.
- They have a lot of AP experience, and they dedicate every resource to that one job.
- Some people mistakenly believe that accounts payable refer to the routine expenses of a company’s core operations, however, that is an incorrect interpretation of the term.
- You may never know if they are billing for idle time, accessing non-work websites, accurately reporting issues, etc., if you don’t set expectations and check that they’re met.
However, outsourcing accounts payable is not limited to top-tier suppliers who can add new skills and improve business processes, rather than just taking over these tasks. As previously mentioned, it involves hiring a third-party provider to manage all AP operations. It avoids the cost of adopting accounts payable software and does not use up company resources to run the show when it comes to the AP process.
Plan for Future with EA’s Outsourced Accounts Payable
Outsourcing AP has many advantages, including lower costs, better cash flow, workflow, stronger relationships with vendors, and the assurance that your AP operations use the most current technology and tools. Besides an innovation agenda, your outsourcer should also demonstrate deep finance subject matter expertise and a robust approach to process documentation. The best partners can readily identify challenges in the full AP lifecycle and are experts at implementing process improvements and best-in-class tools to resolve them. They are also able to take the end-to-end AP process and not just the most basic activities of invoice coding and processing. Outsourced accounts payable services employ stringent quality control measures to guarantee data accuracy and reduce errors.
The exact duties that accounts payable outsourcing services perform vary, but most commonly relate to invoice capturing, purchase order matching, archiving payment records and payment processing. Many companies are considering outsourcing accounts payable to specialized, external bodies. Firstly, they hope to better identify areas where costs can be cut and therefore profit increased. Secondly they wish to improve general organization and efficiency in the business. And thirdly, they are seeking ways to better handle cash flow and capital. To improve their operations, organizations increasingly outsource Accounting to increase efficiency and reduce technology investments.
Everest Group 2020 PEAK Matrix: Procurement Outsourcing Service Provider Landscape and Assessment
The technology that comes with an accounts payable outsourcing provider presents the opportunity to eliminate paper and reduce manual tasks like data entry. No more drowning in paper invoices and no more wasting resources that could be better spent on more strategic tasks. The world is a big place and sending payments to vendors has become increasingly complicated. Companies, especially small to medium-sized ones who don’t have their own security teams, are plagued with security issues.
- But evaluating your options with a complete understanding of what’s available leads to better business outcomes.
- You should also consider the provider’s fees and pricing model, as well as any additional costs or charges that may apply.
- According to most case studies, companies typically use process outsourcing to add value to their businesses and to improve AP dramatically.
- Reputable outsourcing providers prioritize data security and employ stringent security measures to safeguard sensitive financial data.
And as these providers could be thousands of miles away, keeping track of these duplicates can be difficult. For example, back-office employees don’t have to spend hours on manual data entry, recording disbursements and bookkeeping. Accounts payable outsourcing provides a dedicated point of contact for vendor questions and disputes. They promptly respond to vendor inquiries, resolve payment discrepancies, and have open communication channels to cultivate positive relationships with suppliers.
Why do companies outsource accounts payable?
This is especially prevalent when businesses experience periods of rapid growth, which is often accompanied by an increase in invoice volume. While this is great for sales, it also puts additional pressure on your AP staff. This is especially the case for paper-based processes and those manually entering data, chasing down approvals, and heavy PO-based processes.
Growing businesses have to maintain relationships with many suppliers and vendors, and this usually ends up making the Accounts Payable process complicated. Vendors with different invoicing standards/procedures tend to make accounts payable processes quite cumbersome. Businesses can streamline their business processes and increase income by choosing the right supplier. A well-established accounts payable (AP), the system will improve cash flow, reduce expenses and strengthen the relationships between the company’s suppliers. One risk of using an accounts payable service is the potential for data breaches or unauthorized access to sensitive financial information. To mitigate this risk, companies should carefully vet potential service providers and ensure that they have strong security measures in place.
As you’re not physically present where the tasks are performed, it can be difficult to manage any issues that pop-up. You might not even be able to quickly identify the source of problems in the AP processes. However, when you outsource the task to a third-party provider, error reporting can be problematic. Most in-house teams have a financial supervisor, such as the CFO, to manage issues when employees aren’t present.
Your invoice processing costs are too high
These include delegation of responsibilities, implementation of new software, and changes in the submission systems. Outsourcing your accounts payable functions can give you the flexibility to quickly scale up or down, depending on changes in business needs. There’s nothing worse than conducting an accounts payable audit and discovering errors.
When businesses grow at a very rapid pace, there tends to be a sharp increase in the volume of invoices and bills. A consequence of this is that the accounts payable team cannot keep up with their increased workload. If your Accounts Payable department is overwhelmed, something’s got to give. Accounts Payable outsourcing services can provide the relief your accounting department needs. The benefits are clear — lower costs, updated processes, and fewer errors, just to name a few.
The implementation alone would be a nightmare, not to mention extremely costly. Our technology can automate and integrate your transaction workflow, giving you real-time visibility into your business and freeing you to concentrate present value formula on your core competencies. And with many North American organizations having established operations in the region, there is a large talent pool that is familiar with US operational requirements, schedules and pace.
Entering PO, non-PO invoices, Email Management, Reconciliation, Travel Expense Processing, Coding Invoices, Vendor Management, and all other Account Payable tasks get outsourced to ARDEM. We select the resource with the required skills and experience to work for you in that Account Payable function. There is only one word that comes to mind when I think of Haroon Jafree, and that is brilliant! We worked together at Sara Lee (now Hillshire Brands) on numerous business process reengineering projects in accounting and finance, including implementing a Trade Promotions Management System. As a result, we made a dramatic increase in the productivity level of our company.
This includes invoice processing, payment administration, vendor management, and report generation. All accounts payable processes adhere to industry regulations and internal controls to ensure precision, data integrity, and compliance. Our stringent verification procedures, comprehensive documentation, and accurate financial reporting ensure compliance with applicable financial regulations and standards.
So, to reduce costs, they find an AP supplier and hire those services out. In short, they finally change their system by letting someone else handle it. And, to make sure both the customer and the AP team benefit from the relationship, that outsourced AP team is probably using automation. If you’re struggling to manage a complicated, manual AP process, it can be tempting to outsource your AP process.
You cannot control how they handle your accounts or run back-office processes. Essentially, AP process outsourcing transfers tasks and responsibilities to another company for efficient management. AP automation uses business intelligence software to manage your in-house systems (with lower total costs on your part). Accounts payable outsourcing refers to contracting with a third-party team to manage your accounts payable process. In AP outsourcing, activities such as managing short-term debts and creditors are conducted by qualified third-party AP teams. Companies outsource their accounts payable operations in part to gain access to better tools and processes.
An AP outsourcing provider bridges the gap by providing sophisticated security measures and technology for AP processes that reduce the chances of a company experiencing something like payment fraud. Service providers who manage outsourced accounts payable will already have the tools needed for the job, including software, document management, and reporting tools. AP automation can and should be included in this package, which unlocks value in the various accounts payable processes like invoice processing, ERP integration, and payment and remittance management. AP automation streamlines invoice processing workflows, from invoice receipt to approval routing, to PO and receipt matching to the invoice, to review and exception management, to final approval for payment.