Distributors can make their accounts payable and accounts receivable processes more efficient by improving their collaboration with suppliers and partners.
Automating AP and AR processes provides numerous benefits, especially to organizations that handle large volumes of invoices, Industrial Distribution magazine notes. In order to minimize errors such as duplicate payments, companies can implement technology applications to increase the accuracy and precision of accounts payable processes.
In order to make sure the benefits of technology reach the distributor's suppliers and customers, it is important to closely evaluate the accounting process.
Members of management should ask the accounting departments of their organizations and their suppliers to report whether they use paper-based or electronic invoices, if they use early-payment incentives, and if they have a large volume of late-payment fees. The accounting departments should also outline any additional costs their current process generates, from money spent on postage to the costs associated with processing an invoice, recommends the source. Aligning the accounting operations between suppliers and distributors can increase efficiency. A lack of alignment can result in an increase in errors such as duplicate payments, but management can minimize the impact of duplicate payments and other lost profits by engaging a third party to perform an accounts payable recovery audit.
Integrating technology into the processes of other operations can also boost the organization's overall efficiency, such as improving data management and inventory control, the source notes.
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