Every additional invoice adds further load and over time, dampens AP productivity. If there are limited resources within your accounts payable (AP) department, it’s key to identify how the function can scale to better process invoices when volume increases. This is in addition to all of the other financial tasks you need to take on to keep the business growing.
After learning about all the issues that outsourcing Accounts Payable can help with and the benefits of using a third party, you’re probably ready to start researching potential providers. As the business world expands and supply chains stretch farther and farther across the globe, payments to vendors and other service contractors are becoming even more complicated. Even small businesses must rely on vendors in numerous locations to deliver their products and services to customers.
When dealing with multiple vendors, managing a big volume of vendor invoices can be challenging. The more invoices you have to process and send out manually, the longer it takes to prepare them and the higher the risk of error. Outsourcing allows you to focus on core operations while freeing up resources for other business functions. If your team can create value elsewhere in the business by moving to an outsourced AP model, outsourcing might make sense. Accounts payable outsourcing refers to contracting with a third-party team to manage your accounts payable process.
Invoice Processing Services
AP outsourcing solutions put efficient systems in place that allow you to pay vendor invoices on time (or even early) to enhance supplier relationships. A satisfied supplier may offer discounts due to early payments, thus increasing your profitability. An increasing number of businesses are outsourcing their accounts payable processes to a specialized third-party team. Furthermore, onboarding new technology, although necessary, comes with a hefty price tag. Outsourcing is not merely the shifting manual tasks like data entry to an outsourced provider.
This is why having an outsourced accounting team has the advantage of proactivity, where they can spot red flags ahead of time and notify you about expenditures and cash flow, for example. Having trained eyes on your finances at all times can bring considerable peace of mind, as well as the confidence needed to make intelligent financial decisions. With a remote, U.S. based accounting team, CEOs and business owners have access to knowledgeable, trained staff working to help their business run better, grow faster, and make more money. Often at a significant cost savings vs. building an internal accounting department.
- Outsourcing accounts payable processes can result in a loss of direct control over managing financial transactions and vendor relationships.
- AvidXchange’s cloud-based platform enables teams to access all accounts payable bills and payments from any connected device, 24 hours a day, seven days a week.
- When considering a major change to your processes, it helps to explore all your options.
- Manual AP operations such as invoice scanning, matching, validation, and approval can be streamlined and automated by outsourcing accounts payable services.
- This frees your in-house AP department to focus on higher-level tasks and attend to the core business processes that enhance your company’s performance and improve service levels.
- Third-party AP service providers offer professional teams and the latest software to do the job.
Accounting software such as QuickBooks may be used by finance and accounting outsourcing companies to execute financial management duties. While invoice outsourcing and consulting services may be the best option for some businesses, others may benefit from partnering with top AP outsourcing companies such as AvidXchange. 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.
We will help you focus on other vital functions allowing you to grow your business while taking care of all payments, creditors, invoices and massive paperwork. Accounts payable automation refers to implementing software solutions designed to streamline and automate accounts payable processes within your organization. Businesses can reduce manual data entry, minimize errors, and improve overall efficiency by automating tasks such as invoice receipt, processing, and payment. For example, AP automation can lead to a 49% cost savings for invoice processing. One of the biggest benefits of outsourcing accounts payable processes is the potential for significant cost savings. The improved efficiency mentioned in the previous point will lead to savings in several areas, such as reduced invoice processing costs and increased vendor discounts.
AP outsourcing companies don’t just follow best practices when doing their work. They incorporate technologies that identify errors before they become liabilities. If you would like to explore further how Near can help you outsource your accounts payable roles to professionals in LatAm, book a free consultation call today.
Why do companies outsource accounts payable?
Since 2000, Invensis has been catering to the diverse outsourcing needs of clients for multiple industries and constantly striving to add value to clients’ businesses. If you’re facing any of the above issues, it’s time to look into Accounts Payable outsourcing companies. Outsourcing is one option for business owners who want a third party to handle the entire process rather than taking the resources and time to overhaul the department in-house. For most companies, the benefits of Accounts Payable outsourcing are more than worth the cost. Companies outsource their accounts payable operations in part to gain access to better tools and processes.
Outsourcing Accounts Payable: The Pros and Cons
Concerning the drawbacks of outsourcing accounts payable, there is a potential risk to data security and privacy because companies no longer have complete control over how their accounts are handled by third-party vendors. Outsourced AP vendors may also make accounting errors, such as duplicated invoice entries, even if they perform their own audits. Manual AP operations such as invoice scanning, matching, validation, and approval can be streamlined and automated by outsourcing accounts payable services. Outsourcing may help your company cut costs and improve services, but over-dependence on third-party providers introduces more risk. If a third-party company experiences mismanagement or bankruptcy, it may disrupt your accounting services and affect vendor relationships. Invoice receipt and processing is a crucial aspect of accounts payable outsourcing services.
Your Account Payable team members are trained in most of the commonly used Account Payable systems. They are all college educated with accounting degrees and you benefit from their experience in Accounts Payable. As your business grows and your need for Account Payable services grows we can add qualified and trained Account Payable resources to your team. Short term volume peaks can be handled by use of available qualified team members who are on the bench.
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Companies can receive invoices in various formats and templates from numerous sources when they outsource invoice processing to a competent third-party provider. An invoice processing outsourcing company can keep track of all receipts and payments, as well as convert documents into standardized data files. 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. For example, at Auxis, our AP outsourcing teams are able to perform many other AP functions including vendor master maintenance, vendor communication and inquiries, payment proposal preparation, reconciliations and more.
Some companies find that the cost of outsourcing is offset by the overhead savings created by delegating certain processes to an external provider. Conduct a cost analysis to determine if outsourcing your AP processes could improve efficiency and reduce operational costs. Outsourcing accounts payable data means sharing sensitive information such as BPO and bookkeeping definition of appendix in a book or written work details with third-party teams. This could create a potential gap in your business rules and data security systems. 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).