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How an Efficient Accounts Payable can Enhance Profitability?

By December 12, 2022March 18th, 2024No Comments
Accounts Payable Outsourcing Finance Blog

Accounts payable is an essential accounting system that affects not only the accounting function but the entire operations and profitability of a business. Fundamentally, accounts payable are the total amount a business owes to its vendors and suppliers for the goods and services it procured from them on credit. A sum of all the outstanding payments a company owes gets recorded on the balance sheet as the balance of accounts payable.

Accurate accounting of accounts payable is crucial for a business to maintain its cash flow and avoid payment of incorrect invoices. Therefore, it is necessary to understand the accounts payable process.

The Accounts Payable Process

The end-to-end accounts payable process includes the following steps:

  • Invoice capture: Invoice data is entered manually into the system of records. This data includes vendor details, line items, pricing, codes, etc. Since the data is entered manually into the system, it is prone to errors.  
  • Invoice approval: The accounts payable department needs to scan and review every invoice received from the vendors. The invoices get approved by the internal departments of the company. 
  • Payment authorization: Once the invoice is ready to be paid, there is a need to get authorization for the payment. The authorization is for the date of payment, amount, and method of payment.
  • Payment execution: After the payment gets authorized, the payment is processed and the remittance records are forwarded to the concerned vendor. Payment of invoices involves printing checks, signing and mailing them, and initiating the payment with the bank or making credit card payments.

Challenges in Accounts Payable

The accounts payable system is susceptible to errors of omission, duplication, redundancy, etc. Inaccurate accounting of accounts payable leads to inefficient financial reporting. Moreover, it can prevent the company’s employees from focusing on higher-value activities that can contribute to the business’s overall growth. Inevitable human errors in manual and traditional accounting systems cause inefficiencies like late payments, missed opportunities (discounts and waivers on early bill payments), and inaccurate payments.

Outsourcing Accounts Payable for Enhanced Profitability

An efficient accounts payable system can improve the cash flow of a business, and ultimately add to its profitability. Outsourcing accounts payable to an experienced outsourcing company can help a business lower its operations expenses and make timely bill payments.

Outsourcing experts like ARDEM can conduct accurate invoice processing and timely vendor bill payments for companies. The customized accounts payable team created by ARDEM is scalable to integrate with the business’s scale of operations. As you grow, ARDEM’s team grows to take care of your high-volume invoices and bills.


ARDEM offers automated and highly advanced collaborative platforms and cloud technology to a business’s accounts payable teams to do away with the delays in invoice approval and payment authorization to speed up the accounts payable process.

Using the ARDEM Invoice Manager (AIM), a business can gain better insight into accounts payable and invoice processing. Using the expert services of an accounts payable outsourcing expert like ARDEM, a business can make its vendor payment system smooth. With these highly advanced accounts payable services, a business can reduce its costs by up to 30%, which further adds to its profitability.

ARDEM provides Business Process Outsourcing and Business Process Automation Services to established companies to help them improve operational Efficiency and Reduce Costs.  For more information please reach out to us  at or call us at 908-359-2600.