As the most important event in a monthly accounting cycle, the month-end close process is where all transactions are accounted for, balances are finalized, and reports are generated to provide key insights to aid in decision making.
An efficient and accurate month-end close process is key for setting up a reliable accounting system. It improves financial visibility, simplifies auditing, tax filing and helps make informed decisions. However, most businesses fall short of accomplishing and smooth and accurate month-end close process and fail to accrue the benefits; if you are one of them then this blog is for you.
With the inputs of our AP experts at Outsourced Bookkeeping we examine the role of Accounts Payable in the seamless month-end close process and then give you a few tips that can help you build a streamlined month-end close process. Read on:
Accounts Payable – More than Expense Management:
As the circumcentre of expense management, nothing impacts a month-end close process as much as Accounts Payable. Inaccurate or pending Accounts Payable will misrepresent the liabilities and also total income to give inaccurate insights into your financial position. Not only does Accounts Payable impact the cash flow it plays a crucial role in deciding how effective ad accurate the month-end close process can be.
So in this blog let us see how Accounts Payable plays a key role in the month-end close process and then look into how one can improve their AP for better month-end closing.
Role of Accounts Payable in Month End Close Process:
Accounts Payable tracks and manages the short-term liabilities and ensures that the accurate payments are timely processed to the vendors and suppliers. As a critical segmented accounting, accurate Accounts Payable is crucial to maintain optimal cash flow & working capital, facilitate cash good vendor relationships and prevent fraud.
Accounts Payable also plays a crucial role in making accurate cash forecasts while ensuring a timely balance sheet at the end of the month. The Sooner the Accounts Payable is closed faster the management can produce the right insights and make informed decisions.
So it’s always essential for an accounting department to have not only faster but also an accurate AP process to ensure timely month-end closing. According our experts at Outsourced Bookkeeping, month-end close process plays key role in helping the management troubleshoot and make necessary tweaks in line with the business goals. With Covid-19 ravaging the global businesses in general, the need for faster, accurate and streamlined AP now is faster than ever for improved accounting in general and accurate month-end closing process in specific.
Yet most businesses still rely on manual Accounts Payable and fall short of achieving a faster ad accurate month-end closing process and wish to improve your AP game then read on.
Accounts Payable Tips for Accurate & Timely Month-end Close Process:
Digitization of Accounts Payable is the first step for every business to set a stage for improved AP performance. If you have already digitized your AP process then here are a few tips that can help you improve your current Accounts Payable for better month-end closing:
- Centralized dashboard:Consider having a single centralized and standard platform where vendors can submit their invoice and AP resources with the right permissions can immediately push them forward in the processing pipeline. Having this shared service eliminates the common bottlenecks and helps your team accomplish more AP tasks at an aster pace even with fewer resources.
- Set up master data:Inaccurate information for the suppliers is one of the main reasons for fraud or delayed payment processing ultimately resulting in payment processing problems. Considering having a master portal for all the data from SLAs, delivery timelines, compliance mandates, terms and conditions.
- Portal for vendors:Having a dedicated portal or vendors where they can track order status, delivery schedules, product shortages, and payment statuses reduce AP time, errors and eliminate common process bottlenecks in AP.
- Improved communication:Invoice processing can be a long process and the probability of an invoice falling into limbo is high, especially when too many manual processes are involved in AP. While centralized dashboards and vendor portals improve communication, a business must further focus on improving communication between vendors and AP resources
How Outsourced Bookkeeping can improve your Accounts Payable?
Though the above tips look easy, it can be a tad difficult for any accounting department to perfectly implement than for a faster and more accurate AP process without expert help.
If you are a business that is looking to improve its AP process to eliminate the month-end closing problems then our Accounts Payable experts at Outsourced Bookkeeping can help you. Equipped with advanced AP automation tools our team of CPAs and AP experts can build an AP workflow from you from the ground up or can fill the gaps in the current AP process to help you achieve your process goals. If you are looking for expert remote accounting firm with excellent track record in outsourced Accounts Payable Services, you can contact us here: https://outsourcedbookeeping.com/