Are you looking for ways to improve the accounts payable system at your company?
Before the advent of the digital age, accounts payable was a paper process. It revolved around receiving invoices and writing out physical checks.
In today’s digital age, the accounts payable department of many businesses is paperless. It can also be primarily automated or one part of a much larger payment structure.
But how has technology revolutionized accounts payable procedures of today?
Read on to find out more!
The digital nature of today’s work environments has helped many businesses turn to an almost fully automated system.
This is beneficial to a business in many different ways. First, it can help a company save on staffing costs because the process requires fewer employees.
Next, it requires less attention from your employees because there are not the check-and-balances system of the past. This is also why so many freelancers are looking into automation and easier payments online as well.
Lastly, it can reduce the number of errors in accounts payable and the inquiries about payment status.
Your invoices can be processed automatically. This allows your customers to keep track of payment status in real-time.
This also gives your employees more time to focus on other tasks. That is because they will receive fewer calls about where payments are in the process.
Changing The Industry
Accounts payable systems have changed the industry for current and future employees in a positive way.
The term ‘automation’ can bring about a stigma that jobs will be cut and opportunities are lost in that industry.
But accounts payable departments have used advances in technology to the benefit of employees. That’s because staff members are being used in other ways to study and improve upon the process.
This will have a positive impact on employees today and into the future.
Some of these other positions include developing a strategy to handle cash flow management. You can also use it to negotiate prices with vendors. This makes an account payable team member a more versatile part of a company.
Leverage Powerful Data To Grow
Accounts payable trends in the digital era can also be used to learn more about how your customers behave.
For example, you can create reports that show turnaround times between an invoice and payment. This can be valuable for when you are trying to decide whether to increase a customer’s credit line.
You can also use the information from your accounts payable department to have a better idea of what your procurement team needs.
You can leverage this information to save on the added costs of studying data to find patterns. That’s because AP software will give you reliable data with the click of a button.
Your business will be able to review timely data and make decisions that matter.
Avoid Late Fees and Service Charges
The streamlined process of your accounts payable procedures can also be beneficial to your business in other ways too.
It’s important that you resolve outstanding accounts payable issues on time. That’s because customers and vendors want to be paid too.
When you are using an advanced AP system, you can rely on it to make your payments early or on time. This helps you to avoid being hit late fees or service charges for an untimely payment.
By avoiding these fees and charges, you can help reduce your cost of doing business. You can put that money towards marketing or product/service development.
Electronic invoicing helps companies reduce their footprint on the environment. It also allows them to move towards an automated AP process.
Businesses and government bodies are able to reduce costs and improve efficiency.
For example, The United States Government must use e-invoicing for all of its departments by the end of 2018.
E-invoicing also allows a company or government body to avoid producing paper documents. This enables them to secure these files in digital format. It also allows them to cut down on unnecessary paperwork and finding a place to store these files.
Accounts payable systems of today also allow companies to use this information in a more visible way.
When someone asks the question, “What is accounts payable?” they may be surprised to learn that it has many different layers of information. This includes employee records, customer data, and more.
Top-level executives like a CFO can gather large amounts of data. They can then organize it in a way to determine the most effective way to use cash flows.
For example, a CFO can use data to recognize trends in payment cycles to vendors. This can help your business make better decisions about how to improve cash handling.
This way your leaders can learn more about your business. They can also create effective reports to share information.
Protect Sensitive Information
Technology has given accounts payable departments more secure systems for storing employee data.
Did you know that in 2017, there were more than 16.7 million victims of identity theft in the United States?
An accounts payable department is full of valuable information about customers and employees. This includes someone’s full name, address, date of birth, and social security number.
The automated nature of AP technology allows businesses to limit access to information.
That’s because this information can be kept in its own system. Instead, an employee or customer can be identified by a unique number or set of letters.
This way your company does not print documents with loads of sensitive information.
Wrapping Up: Improved Accounts Payable Procedures
The improved accounts payable procedures of today are just one way that technology is helping to grow businesses.
The digital age is also enabling companies to communicate more efficiently. They also have a platform to market their product or service in a unique way.
At Catalyst For Business, we are a leading global publication for the online business community. Our community includes entrepreneurs and senior managers who share their experiences.
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