The accounts payable process involves managing a company’s financial obligations to its creditors and vendors that includes the following steps:
- Invoice Capture, Organising, and Reviewing: AP process starts with invoice capturing and separating invoices for proper organizing. The Accounts Payable team monitors the email inbox regularly to avoid invoice processing delays. The team needs to code the invoice based on their type (PO or non-PO). To avoid risks associated with data accuracy, companies automate their invoice processing.
- Matching: PO-based invoices are reviewed and matched to the POs (purchase orders). The AP team verifies if the number of products or services mentioned, costs, discounts, etc., are correct in the invoice.
- Invoice Approval and Recording: Next, invoices are sent for approval. The team tracks the approval process to ensure prompt approval. After invoice approval, invoices are recorded in the company’s accounting system with accurate data. BPO (business process outsourcing) companies help businesses to automate the Accounts payable processes for timely invoice approval.
- Payment Authorization and Execution: Once the invoices are ready for payment after approval, the AP team needs the authorization to remit the payment. Following payment authorization, the invoice is paid and the vendor is informed. Now the invoice is closed in the system.
When companies outsource accounts payable, BPO companies take a closer look at their internal processes to understand what can be done to improve the Accounts payable efficiency in the company. They weigh out vendor relationship management. Then, start working to streamline the end-to-end Accounts payable process.