No other branch of accounting is as complex and as tedious as manual Accounts Payable when a business process a large volume of invoices every month. Every step of the process right from the invoice capture to payment processing is riddled with challenges that cost time, money, resources and even financial discrepancies.
Fortunately, due to the rapid technological adoption in the accounting industry over the past decade, Accounts Payable is undergoing rapid transformation. The goal of every technology upgrade is to make the entire process streamlined, quick and less expensive.
As a remote accounting firm specializing in Accounts Payable we regularly help businesses adopt new technologies to accomplish these goals.
If you are a business that is looking to streamline your AP operations to provide you greater flexibility while reducing your total cost of operations, we recommend you pay close attention to the following AP trends for the year 2023:
Data Analytics in Accounts Payable:
Digital transformation is all about automating the existing process and utilizing the generated data to further tweak and optimize the process. Being a numbers game, no other field gives as much scope as accounting does when it comes to the usage of data analysis. And due to the amount of capital tied in Accounts Payable has become the most fitting area to leverage data analytics.
Data analytics is the science of analysing the raw data for extra insights to further optimize the process. In the case of AP, data analytics is being widely used to detect potential payment frauds, abnormal payments, duplicate invoices, suppliers, unusual supplier data or information, and incidents of risks. The data analysis is not only being leveraged to detect the risks but also provides vital intelligence to further optimize the AP process.
Surge in Cloud-based Accounts Payable Solutions:
Cloud-based software has transformed how things are done in every industry. Project management, human resources, customer relationship management – every aspect of the business is being transformed by cloud-based software and accounting is no different. Particularly accounts payable which is a manually intensive and complex process can be simplified and scaled easily with the help of cloud-based AP.
A cloud AP solution automates data entry, streamlines approvals, simplifies payment processing and offers greater security with minimal investment as compared to hard and costly in-premise AP. Particularly in the post-pandemic era where remote working has surged, cloud-based AP solutions are rapidly growing to tackle the AP challenges and make the AP process future-proof.
Accounts Payable Integration for Better Collaboration:
The best thing about cloud-based AP solutions and AP automation is the flexibility it offers in integrating with other core functions of the business. For example, ERP is being tightly integrated with Accounts Payable to streamline procurement, risk management, compliance and project management.
Being the payment centre of the business Accounts Payable can also integrated with be streamlined marketing and sales for smooth collaboration between departments. This not only simplifies collaboration but also provides more visibility and compliance across departments. At Outsourced Bookkeeping, we have helped many businesses set up and integrate the AP with other processes. If you are considering AP integration with ERP and other departments, you can contact our AP specialists here.
Focus on Building Better Relationships:
Accounts Payable automation digitized and streamlines invoice processing, approval and payment processing to enable smooth AP workflow. The data analytics helps identify the risks and pain points for further cash flow optimization. As businesses slowly tend towards gaining more control over the AP process, the focus is shifting towards building strong vendor relationships the bedrock for strategic sourcing opportunities that enable competitive performance.
Amicable vendor relationships turn suppliers into strategic partners which are key for the long-term growth of a business. Now that AP automation tools have reduced the burden and errors, businesses today are focusing on building strong vendor relationships for better communication, and collaboration for gaining a competitive edge right from sourcing and procurement. If you are a business looking to do the same, here are a few pointers from our Accounts Payable experts at Outsourced Bookkeeping:
- Stay updated and maintain clear communication with the vendors.
- Maintain common expectations and review them periodically.
- Avoid conflicts and take a collaborative approach when they happen.
- Set up vendor portals and ensure a data stream for real-time updates.
Accounts Payable-As-A Service: Reduced processing costs, streamlined processing, data analytics for AP optimization, more time for resources to build strong vendor relationships – all these benefits are only possible for a business when they can set up a robust AP process. Many small and medium businesses are far from automating AP due to a lack of expertise, time or resources until the last 3 years.
Over the last 5 years, there has been a rapid surge in outsourced Accounts Payable Services which help businesses accrue the benefits above without having to invest time, money or resources to build an AP process. For example, as a remote accounting firm, Outsourced Bookkeeping regularly works with businesses to solve their AP pain points. We also work with small businesses to build and execute their Accounts Payable from the ground-up. This Accounts Payable-As-A Service is slowly catching on and will prove to be a winner in the years to come. If you are looking for a remote accounting firm to outsource your Accounts Payable services you can find us here: https://outsourcedbookeeping.com/