The accounts payable process involves invoice processing and vendor communications in managing a company’s financial obligations to its creditors and vendors. To know exactly what the accounts payable process is you need to learn about the accounts payable process steps. Find below the steps of AP Process:
- Invoice Processing: Accounts payable process starts with the receipt and sorting of invoices to organize invoices by date. The accounts payable process team monitors the email inbox regularly to avoid invoice processing delays. The accounts payable team needs to code the invoice based on their type (PO or non-PO). To avoid risks associated with data accuracy, companies automate invoice processing.
- Matching: This is one of the crucial accounts payable process steps. PO-based invoices are reviewed and matched to the POs (purchase orders). The AP process team verifies if the number of products or services mentioned, costs, discounts, etc., are correct in the invoice. 3-way matching of invoices will include matching with Receiving reports.
- Invoice Approval and Recording: Next one in accounts payable process steps is invoice approval and recording. Invoices are routed for approval. Approval routing and tracking can be automated in the account payable process. After invoice approval, invoices are recorded in the company’s general ledger accounting system with accurate data. BPO (business process outsourcing) companies can help businesses to automate accounts payable processing for timely invoice approval.
- Payment Authorization and Execution: The last one in the accounts payable process steps. Once the invoices are ready for accounts payable payment process after approval, the AP process 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 process, accounts payable outsourcing companies first understand their internal account payable processes. They identify opportunities to improve the processing of accounts payable.
ARDEM uses business process automation, cloud services, and AI to help companies improve their accounts payable procedures. For more information visit our accounts payable process outsourcing section.