7 Ways to Boost Your Accounts Payable Efficiency

An efficient accounts payable (AP) process is more than just ticking boxes on payment deadlines—it’s a powerful tool for strengthening supplier relationships, avoiding costly late-payment penalties, and even unlocking valuable savings through early payment rebates. However, for many businesses, AP inefficiencies can lead to common headaches like matching errors, unauthorised purchases, misplaced invoices, duplicate payments, and late disbursements. 

So, how can your accounts payable team tackle these challenges head-on and transform AP from a pain point into a strategic advantage? In this blog, we’ll explore 7 practical ways to boost your accounts payable efficiency, helping your business save time, cut costs, and enhance overall financial operations. 

7 Ways to Optimise Your Accounts Payable Efficiency 

1) Go Paperless 

There are significant advantages to automating the accounts payable process, and this includes maximising your savings, discounts, and rebates. AP automation enables businesses to automatically generate new purchase orders (POs), electronically validate and accept invoices, approve requisitions, track goods received, and pay invoices on time. 

2) Centralise AP Processing and Reporting  

Moving from siloed teams working with different divisions to a centralised team can help in implementing standard processes and technologies across a business. By clearly defining the KPIs for the AP team, it becomes possible to measure performance against predefined metrics and gain greater visibility in the entire process. Needless to say, centralisation enables businesses to accomplish more tasks quickly and with fewer resources. 

3) Proper Procurement and Inventory Management 

Cash is king; it needs to be used in a judicious and prudent fashion. Once a business is able to optimise its inventory, it can focus on reducing costs and improving staff communication. It’s also a good idea to do periodic inventory checks and invest in automating the procurement system. 

4) Plan for Timely Payments 

On-time payments lead to better relationships with vendors. Additionally, this could translate into better deals, payment terms, and discounts. From a long-term standpoint, happy vendors may enable bulk buying with significant discounts, recurring orders, and maximised credit periods. The trick here is to optimise the payments so that you can get all the early bird discounts without depleting your working capital. 

5) Eliminate Manual Errors 

AP automation is the key to eliminating human error. Automated systems can capture both digital and paper-based information accurately, automatically process new invoices, and enable smoother invoice payments. 

6) Set Up Supplier Portals 

This can be advantageous to both a business and its suppliers. A supplier portal can keep track of the order status, delivery schedules, potential product shortages, and payments received electronically. Automation also reduces manual errors and helps improve accuracy. 

7) Create Management Workflows 

These can help increase the efficiency of AP processes. Management workflows can also enable businesses to better identify and resolve any bottlenecks and streamline the AP process; thus, improving efficiency and liquidity management. 

Discover the right approach for your business. Explore the pros and cons of AP outsourcing and automation in our latest blog. 

How Can QX Help in Increasing Accounts Payable Efficiency? 

QX provides outsourced finance & accounting services to businesses across industries. Over the last decade and a half, we have enabled transformation for some of the leading manufacturers in the market. We follow a unique partnership that allows us to better understand your organisational needs, devise effective solutions and ensure seamless transition. 

Our range of services is highly flexible in nature and our team can work with all major finance & accounting software. In addition, we are also capable of identifying and implementing any additional software to boost your accounts payable efficiency. 

Partner with QX to get the support you need for transforming your finance operations. Contact us to set up a free, no-obligation consultation now. 

Originally published Jul 27, 2021 07:07:19, updated Dec 05 2024

Topics: Accounts Payable Process