How To Manage Your Accounts Payable And Boost Efficiency

The accounts payable (AP) function is vital for the financial health of a company. Traditionally, an AP team member manually matches, and verifies invoices. He sorts them by date, vendor, or else, and enters payment information. Thus, payments are made to suppliers. This involves high processing costs. It is also a time-consuming process.

In this blog, you’ll learn how accounts payable outsourcing can solve all your AP issues. So, let’s get going!

Everyone knows that manual AP processing can cause a lot of problems. It makes everything slower and leads to lost documents. It also creates data errors and harms supplier relationships. This results in lost vendor benefits. Manual AP processing is expensive. It also puts cash flow at risk. Research shows that processing a single invoice manually can cost about $15 on average. In some cases, it can even reach up to $40! It can cause late or incorrect payments. Thus, it can impact a company’s reputation.

Many companies are exploring solutions to the above-mentioned issues. They are now finding outsourcing an effective strategy. You will be amazed to know that finance is among the most outsourced services. In fact, 44% of companies choose to outsource their finance functions.

The growth of the global AP outsourcing services market is projected at a CAGR (Compound Annual Growth Rate) of 12.3% by 2030. The key drivers of this significant growth include:

• Rising Number of Small and Medium-Sized Enterprises (SMEs): SMEs want to handle their AP processes efficiently and cost-effectively. So, they are increasingly turning to accounts payable outsourcing companies.
• High Costs for Large Businesses: Large companies face the high cost involved in hiring and training in-house teams. So, more large businesses are considering BPO companies. They know that with outsourcing, they can access expert services without the overhead costs.

Benefits of Accounts Payable Outsourcing

Outsourcing your accounts payable functions to BPO companies can be a game-changer for your business. Accounts payable outsourcing companies offer various benefits. These are

• Improved accuracy in accounts payable invoice processing.
• Better accounts payable vendor management.
• Access to advanced technologies.
• Streamlined processes to process invoices quickly and accurately.
• Businesses focus on their core activities.
• By choosing accounts payable outsourcing, businesses can enjoy:
  • Reduced processing costs and the need for fewer in-house staff.
  • Faster invoice processing and payments
  • Reduced risk of late fees.
  • Improved cash flow management.
  • Fewer errors and discrepancies in data.
  • Better financial reporting and vendor relationships.

In today’s fast-paced business era, companies seek trustworthy outsourcing providers. They look for cost-effective accounts payable outsourcing services. They want the best outsourcing companies that use the latest technologies. ARDEM fits these needs perfectly by offering innovative solutions and exceptional accuracy.

ARDEM is a business process outsourcing company with more than 20 years of experience. ARDEM’s AP services help enterprises transform their AP processes and drive efficiency. We are one of the most renowned accounts payable outsourcing companies. We have the expertise to meet clients’ diverse needs with our experience of decades.

ARDEM capabilities in AP include:

• Quick setup of your AP team to support your growth and scalability
• Effective AP processes with high data accuracy
• Greater efficiency with shorter invoice processing cycles
• Latest technologies (OCR and ICR) with advanced tools, robotic process automation (RPA), cloud and collaboration platforms, and much more.

Here is the workflow that we follow to manage AP and boost efficiency for our clients:

1. Email Inbox Management

Separating invoices from other emails and inquiries is important. This helps maintain a well-organized AP process. Our team monitors the email inbox regularly to avoid any delays in invoice processing.

2. Identify the Type of Invoice and Code them

Invoices can be PO-based or non-PO based. The team identifies the invoice type and codes the non-PO based. Then they send them for approval.

3. Match PO Invoices to Purchase Orders

PO-based invoices are matched to the purchase orders. This helps to verify that all information is correct. This includes the number of products received, price, applicable discounts, and other details.

4. Enter PO and Non-PO Invoices into Accounting System

After invoice review and approval, next comes the task of entering the PO and non-PO invoices. The AP team enters them into the client company’s accounting system. All relevant details about vendors are entered into the system correctly. This includes name, invoice title or number, the amount owed, etc. ARDEM automates this process to achieve the goal of high accuracy.

5. Monitor the Invoice Approval Process

Our AP team keeps monitoring the process and follows up on pending invoices. This ensures timely invoice approval.

6. Communicate with Vendors

Effective communication with vendors is crucial in the AP process. The AP team ensures effective communication with vendors regarding anything. This can be invoice status, payment, or other related issues. We always use the primary mode of communication. Thus, we ensure quick response to inquiries and resolve them.

7. Process Payments

Our accounts payable outsourcing team processes the invoice payments according to the vendor’s payment terms. Thus, they close the invoices in the system.

8. Reconcile Vendor Statements and Resolve Discrepancies

The AP team reconciles the vendor invoices with the accounts payable ledger. This ensures that all invoices have been paid accurately. The team reviews invoices and purchase orders and receives reports. If any discrepancy is found between company records and vendor invoices, they resolve it.

9. Vendor Management

The team is responsible for updating the company’s system with new vendors. They keep their contact and banking information up to date. This ensures efficient accounts payable vendor management.

10. Monitor Accounts Payable Aging Report

The AP team keeps track of accounts payable aging to ensure timely payment.

11. Reconciliation Participate and Intercompany Transactions

Client companies get support from ARDEM in inter-company settlements. They also participate in accounts payable reconciliation by providing necessary documentation and information.

These steps ensure that your outsourced accounts payable process is done efficiently and effectively.

ARDEM provides highly efficient AP solutions. We are aimed at helping companies focus on their core competencies. Here is an overview of how businesses benefit from their AP services:

Outsourcing reduces costs associated with recruiting, training, compensating, and maintaining a dedicated AP team.

• Outsourcing AP function enables a business to convert fixed costs associated with in-house AP staff into variable costs. It is because it needs to pay for the services used only.
• The cost of invoice processing can be reduced with automation. You can outsource your entire AP workflow and save an immediate 30%.
• Enterprises can have the required skills from a large pool of talent. There are no hiring or training costs involved. So there’s no need to invest in infrastructure and people.

ARDEM’s experienced resources can help you transform your entire AP processes. Here’s our AP processing teams can help you:

• They can discover inconsistencies in the previous AP processes. They can create an entirely new workflow if required. With ARDEM, companies can either use their existing AP process or opt for cloud platform solutions.
• They follow a multi-step quality check and a three-way match process. Thus, they eliminate errors.
• With automation, they can ensure data accuracy. They make sure that there are reduced errors. So, your accounts payable invoice processing can be completed in a shorter time frame.
• They help enterprises free up their time to focus on more strategic tasks in their business.

We provide comprehensive dashboards with our AP automation solutions. This provides insights into the invoice payment cycle. So, you can export or import data in real-time. Real-time access to data is ideal for AP function analysis and reporting. It is specifically at the closing of payment cycles.

You can have your AP teams with ARDEM within a short period of two weeks. Do not worry about increasing AP invoices when you want to scale up your business. ARDEM will take care of your needs as you grow. We will add members to your AP team from a large pool of qualified analysts.

ARDEM teams ensure faster and on-time payments. This increases the creditworthiness of their clients among suppliers and lenders.

The AP team manages payroll records, invoice collection, invoice payment, and prepares reports. You can free yourselves from AP responsibilities by outsourcing AP processes. Concentrate on your core competencies and improve productivity in the business.

Outsourcing helps you manage your AP processes more efficiently. It also reduces costs and allows you to focus on what you do best. The global market for AP outsourcing services continues to grow. So, now is the perfect time to explore how AP outsourcing can benefit your company.

Outsourcing companies provide expert solutions tailored to your specific needs. They ensure that your AP processes are handled with the utmost care and professionalism. By using their expertise in accounts payable outsourcing, you can boost your business efficiency. You can drive growth in today’s competitive market.

ARDEM provides technology, people, and consulting. We continuously improve and innovate to maintain a lasting, valuable relationship our their clients. Thus, we boost operational efficiency in your accounts payable processes with a well-defined methodology. So, waste no more time and reach out to ARDEM today. Take advantage of our value-added accounts payable outsourcing services.