Looking for an Accounts Payable Resource? Read On to Know More.

Outsourcing is considered a valuable strategy for most businesses irrespective of size. Accounting or accounts-related business processes, including Accounts Payable (AP) function, are among the most common areas where businesses choose to outsource.

AP is a function in accounting and one of the critical components of financial management in a business. 

• AP represents the department that keeps track of what the company owes to vendors, suppliers or other creditors. It ensures timely invoice processing, approval and managing funds for timely payments. 
• Managing accounts payable effectively is crucial for a favorable cash flow, maintaining strong vendor relationships, and improving financial planning.
• Also, accurate AP information is essential to produce accurate financial statements.

The AP process is different from the procure-to-pay (P2P) process. In fact, P2P combines procurement and AP functions. The P2P process begins when the need arises for goods or services in a company and completes after the payments for those goods or services. It can be said that the AP is a part of P2P. 

As mentioned, AP is an integral part of a company’s finances. It requires an experienced person or team to handle it efficiently. Companies, irrespective of size, look for an AP resource – skilled teams – to handle AP functions. Most companies approach leading business process outsourcing (BPO) service providers specializing in Accounts Payable outsourcing.

AP outsourcing is defined as when a business hires a third-party (accounts payable outsourcing companies or service providers) to perform AP functions rather than handling them in-house. 

Accounts payable service providers are professionals that enable businesses to get more done with high accuracy and improved efficiency without recruiting a full-time team. They can help businesses to keep invoice processing costs under control and focus on the core business that they actually enjoy and are good at.

The outsourced accounts payable department or teams are responsible for various tasks:

1. Review and Record Invoices 

Organizing and Coding Invoices:

AP teams first need to separate invoices from other emails to maintain a well-organized AP process. Monitoring the email inbox regularly is necessary to avoid any delay in invoice processing. Two types of invoices are PO-based and non-PO based. The AP team needs to identify the invoice type and code them before getting them approved. The team resolves discrepancies if found during reviewing invoices and vendor statements.

2. Matching with Purchase Orders  

PO-based invoices need to be matched to the purchase orders. The AP team verifies that all information provided in the invoice is accurate – the number of products or services received, price, applicable discounts, etc.

3. Route Invoices for Approval 

The AP team maintains control by ensuring that the invoices are approved correctly. They keep tracking the approval process to ensure timely approval. After invoice approval, the AP team records the invoices in the company’s accounting system. They ensure that all details about suppliers – title, invoice number, the amount owed, etc., are recorded accurately into the system. Outsourcing companies automate the AP processes to ensure timely invoice approval.

4. Remit Payments 

After review, approval, and records, the AP team processes the invoice payments following the vendor’s payment terms and marks the invoices closed in the system. Teams review and process manual checks for accuracy and then remit payments. 

5. Vendor Management 

The outsourcing partner updates their client’s system with new vendors or suppliers. They ensure that the contact and banking details are up to date for effective AP vendor management.

6. Reconciliation Support and Reporting 

Client companies get support from their AP outsourcing service provider in intercompany settlements. The team participates in AP reconciliation by delivering the required documents and information. They produce and analyze monthly reports.

In today’s competitive world of businesses, the in-house AP domain needs to carry out more tasks effectively. AP tasks, reviewing, checking, and approving invoices, may be difficult for large, even small companies. Monitoring many activities regularly and resolving issues in the AP department turned out to be challenging for the in-house AP team.

Processing a single invoice takes many steps that cause errors if processed manually. Errors may make invoice processing more lengthy, and lead to disputes with vendors and delayed or duplicate payments. An In-house AP department may lead to negative consequences for the company’s creditworthiness.

Outsourcing companies have the skilled resources to align and streamline AP processes. They have the capability to provide an AP team with the required skills – from managing a bunch of invoices to a huge number of invoices.

Oursing helps companies to focus on their core business activities.

Outsourcing providers keep track of all the AP activities to take advantage of discounts and offers from vendors for timely or early invoice payments. 

Outsourcing AP functions give companies faster and much more efficient results with Automation using the latest technologies.

Accounts payable outsourcing for small businesses and large companies improve AP systems alike – improved accuracy, enhanced vendor relationships, boosted efficiency, and better financial planning.

Small businesses, making up 99.7% of all US firms with paid employees, are defined based on varied size standards for different industries set by the Small Business Administration (SBA). Depending on the industry, companies’ AP outsourcing requirements vary widely based on the number of invoices that come in each day.

Therefore, they need an outsourcing partner with experience of decades and in different industries. 

With the experience of decades, ARDEM has developed a proven process to help businesses streamline their AP function. 

• ARDEM clients benefit from the best accounts payable data entry practices as they use a combination of manual and automation solutions. It helps to extract data from multiple sources – physical documents, scanned papers and digital files.
• ARDEM can provide you with your AP team within two weeks whenever you need to scale up your business. They have a large pool of talent from across the globe to meet varied needs of different small or large businesses.
• We do not disrupt the client’s existing AP system/teams. Clients can utilize their existing ERP and the ARDEM team can integrate it with their system or teams. 
• With the transformative force, automation, ARDEM helps clients to streamline the way they collect, process, validate, pay and report invoices and ensure extensive quality. 

ARDEM’s experienced team and advanced technology can help businesses improve their AP system and achieve greater efficiency. Ensure compliance and maintain business credibility that matters most to successful growth.

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 pricing@ardem.com or call us at 908-359-2600.