Accounts payable is one of the most important aspects of your business. After all, it’s what keeps it profitable and thriving. Since the way you manage your accounts payable process significantly impacts your cash flow, bottom line, and reputation, implementing best practices is essential. Let’s take a closer look at the accounts payable best practices that can steer your business toward unparalleled success.
1. Ensure Proper Invoice Coding Standards
Invoice coding often gets overlooked. However, when it’s mishandled, it often leads to duplicate payments and fraud. To avoid these issues, it’s your job to design invoice coding standards and ensure your employees are well trained on them. A few examples of invoice coding standards you may want to consider include:
- No spaces before, in between, or after the invoice number.
- No periods, commas, or other punctuation marks in the invoice number field.
- No leading zeros in the number field.
- No al-pha or numeric characters to invoices with a true invoice number.
2. Perform an Accounts Payable Audit
By auditing your accounts payable process, you can find out if you’re losing money to errors or fraud. Not only can an audit help you pinpoint overpayments, it may reveal common errors that you can correct and prevent in the future. A comprehensive accounts payable audit usually involves the following steps:
- Determine the scope of your audit.
- Pull relevant data and get rid of non-viable vendors.
- Plan your outreach efforts.
- Prepare for statement audits.
- Begin the audit.
3. Automate Redundant Tasks
Automation can do wonders for your accounts payable process. After all, printing, mailing, duplicating, and storing paper documents plus the risk of human errors can lead to a great deal of inefficiencies. If you take advantage of automation, your accounts payable team won’t have to spend as much time on manual tasks. This will free up their schedules so they can focus on big picture items such as strategy and growth opportunities.
4. Reconcile Accounts Often
It’s all too easy to lose money during account reconciliations. If you paid a vendor more than what is stated in the ledger due to a late fee, for example, you won’t have an accurate view of how much cash you actually have in the banks. This may lead to bounced checks as well as reputation and credit issues. For this reason, it’s important to reconcile your accounts on a regular basis, ideally with an automation solution.
5. Opt for Professional Help
You don’t have to rely on your in-house team to improve your accounts payable process. It may make sense to trust an outside company like Technology Insight for assistance. We are pleased to offer a variety of services so you can make duplicate payments, payment errors, and inefficient A/P processes a thing of the past. Request your free assessment today.