Topics: Accounts Payable Automation, Accounts Payable Optimisation, Accounts Payable Process

Accounts Payable Department: An Overview

Posted on March 30, 2022
Written By Divya Ramaswamy

Accounts Payable Department: An Overview

Accounts Payable (AP) is the department within organisations that tracks payments owed to suppliers or other creditors and ensures timely approval and processing. Given how it can directly impact cash flow, supplier relationships and regulatory compliances, Accounts Payable (AP) is one of the most critical aspects of any organisation’s finance function.

Accounts Payable: Everything You Need To Know

Want to know more about Accounts Payable? Check out our ultimate guide and optimize payables for your business.
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Why Do Organisations Need a Dedicated Accounts Payable Department?

AP departments are accountable for several factors that contribute to the overall financial health of organisations as it oversees the outflow of cash. From making timely supplier payments nurturing positive relationships to maintaining accurate data & reports, the accounts payable department tackles important financial interactions and helps guide the overall AP process.

What Does the Accounts Payable Department Do?

The Accounts Payable department serves as a hub for the financial well-being of an organisation. It has evolved from a tactical transaction-focused process to a strategic business function that optimises working capital, enables greater savings, and helps improve supplier relationships.

A robust AP system ensures your business or organisation doesn’t have liabilities on your books for too long. Continue reading to gather everything you need to know to build one:

What are the Roles and Responsibilities of AP Specialists?

It could be assumed that the entire purpose of AP is simply to make timely payments on behalf of the company. But in reality, even a single purchasing transaction involves several steps, and AP might have to contend with numerous transactions frequently. AP professionals help procurement teams streamline the payment part of their P2P operations by delivering improved compliance and faster cycle times.

From invoice receipt, scanning and processing to exception management and payment reconciliation, AP department staff offer the organisation end-to-end financial, administrative, and clerical support. The role of the AP department in an organisation includes the functions they perform to control their accounts payable effectively. It involves completing payments and controlling expenses by receiving payments, processing, verifying and reconciling invoices.

Accounts Payable specialists manage outgoing bills and invoices on behalf of the organisation, including utility payments, employee expense accounts, inventory invoices and reimbursements. They play a vital role in most organisations by maintaining financial records and assisting with the general operations of the finance team.

Routine tasks and responsibilities of this role include:

  • Completing payments & controlling expenses
  • Processing, verifying and reconciling invoices
  • Updating and maintaining records of expenditures
  • Verifying entries and comparing system reports to reconcile processed work
  • Paying vendors, settling company credit card bills
  • Issuing stop payments and purchase order amendments
  • Ensuring that all payments are sent on time and are made by company policy
  • Resolving payment discrepancies and disputes on behalf of the organisation
  • Day-to-day financial tasks and generating financial reports

An efficient and well-organized AP department is a critical asset for any business, and AP specialists play a vital role in the company’s finances. Because of this, employers looking to hire AP professionals look for a long list of expertise and traits such as financial knowledge, specialised accounting expertise, confidentiality, communication skills, problem-solving, adaptability and organisational skills. The AP team must be built with talents with the right blend of technical savvy and interpersonal skills.

Understanding the AP Department and Career Paths

AP specialists pursue various career paths as their roles allow them to explore several areas in finance and accounting. They can typically advance their careers by obtaining professional degrees and certifications. Some potential career paths for AP specialists range from AP Clerk, AP accountant, Certified Public Accountant, Auditor, and controller to a financial planner, accounting manager, personal financial advisor, and director of accounting.

Businesses organise an AP department structure that makes sense and contributes to effective operations. The actual hierarchy an organisation chooses to implement will vary based on the available talent and payroll. But the staff must be provided with a transparent chain of command pertaining to their duties and responsibilities.

Looking to Improve your AP Efficiency? Speak to our AP Optimisation Experts today!

QX Global Group is a leading finance and accounting service provider, supporting businesses across several industries in the UK and US markets. We have helped clients optimise their entire payables process, improve supplier relationships, and decreased operation costs via process excellence, standardised AP practices and strategic use of automation.

Book a Consultation

We hope you enjoyed reading this blog. If you want our team to help you optimise your payables process, improve supplier relationships, reduce costs and transform your business operations, just book a call.

Originally published Mar 30, 2022 10:03:24, updated Apr 05 2022

Topics: Accounts Payable Automation, Accounts Payable Optimisation, Accounts Payable Process

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