Accounts Payables

It is rather an accepted norm to view outsourced Accounts Payable services as a traditional mandate. However, each passing year we witness fleeting trends that influence and impact the outcomes of Accounts Payable. As we stand midway across 2019, now is as good a time as any to assess and analyze the strategies and trends that have made a difference this year. With trends and tactics evolving every day, it is highly critical to stay abreast and lead from the front to make a difference.

The forecast of 2019 looks very promising with the substantial impetus provided by today’s technology. However, leveraging these offerings and transforming them into tangible results is what would make all the difference at the end of the day.

Here are the top 5 essential  Account Payable trends to look out for in 2019:

1.Accounts Payable Automation

The crux of the efficiency of Accounts Payable stems from the competence of the invoice routing and data entry. A lot depends on the precision with which these tasks are undertaken. It has also been discovered, in a recent study that the two biggest challenges within Accounts Payable were the manual data entry and the manual dependencies of invoice approval.

In an attempt to increase efficiency, organizations are now transitioning towards automation. Automation would simplify the entire process and eliminate any room for human errors. Automation takes the top spot in terms of the Accounts Payable trends to watch out for in 2019.

Some of the outcomes of automation that can positively impact the business are:

• Swifter invoice approval rates
• Reduced processing costs
• Heightened visibility across the entire AP process
• Enhanced productivity

2.Using Big Data as Spearhead

How much data does your organization have lying around without being tapped into? It is highly probable that you have enormous amounts of data that you barely feel the need for. The data if appropriately used by the Account Payable teams could be a total game changer. The data can be leveraged to completely transform the process of Accounts Payable in your organization. Big Data is no longer just a buzzword. To stay on top and keep up with evolving trends, it would be quintessential to make good use of the data that you have at your disposal.

An analytical study into the dynamics of the approval of an invoice along with the time taken can help shed greater insights into the overall process. Spend analysis reports can help assess the financial well-being of the organization. This in turn can instate transparency and help improve the cash management.

3.The all-silver Cloud

Every dark cloud has a silver lining, doesn’t it? Now imagine an all silvery cloud… Looking good eh?

Well, studies show that over 58% of large companies use cloud computing. Generally, when a new technology debuts, it brings along varying degrees of cynicism and apprehension. But today, cloud has become the norm. Operating on a subscription-based service model, cloud is also highly cost effective. Records also show that companies that migrated to cloud have shown a growth in revenue by 15%.

The accessibility that comes with cloud can be a real key differentiator. Managers being able to remotely access, review and approve invoices can drastically bring down that time involved. Also, unlike AP software that may periodically require updates, at times even leaving the software temporarily obsolete. Cloud computing also ensures high level of data security.

4.Fraud Prevention

A report tells that about 86% of organizations have had at least one incident of fraud in the past two years. The report also goes on to state that, all the companies, regardless of the incidents hold fort and strengthen their security features consistently. Organizations don’t generally roll back to an older state threatened by these attacks.

The rise of modern computing technologies has almost always been parallelly accompanied by growing threats and vulnerabilities. As 2019 promises to be a big year for Accounts Payable, it is also going to be clouded with the evolving security challenges. These threats, when circumvented can pave way to swifter and more reliable monetizing avenues.

One of the easiest ways to reduce fraud is migrating completely to digital transactions and getting rid of paper checks. It has also been studied that digital transactions are capable of reducing fraud by at least 10 times as opposed to conventional methods. Investing in a fully automated procure-to-pay solution should help voraciously combat fraud.

This could be the year that Accounts Payable finally sheds its cost-centric stature to unveil a more profit centric stature.

5.Evolving Skill set in Accounts Payable

The transition from a technology to another is not as straightforward as it sounds. It doesn’t just take effect after installation of the requisite hardware and software. It involves a lot more than just setting up the system. The demand for new skill sets will necessitate employee training and skill upscaling. From a more manual skill set of data entry the demand would shift over to more cerebral skillsets like data interpretation and business analysis.

It is also likely that skills like change management, software administration, performance analytics would be prerequisite on the resume’ of an accounts payable manager.

Why Velan?

With a legacy of proven proficiency spanning across a decade, Velan is equipped with a veritable pool of talents and skill sets that cater to the evolving needs of today’s technology driven world.

Talk to our Experts today [CTA] and give your business the smooth sailing it deserves!!!

Citation 1 :  Accounts Payable : https://www.levvel.io/resources/report/pitching-roi-for-accounts-payable-automation

Citation 2: Cloud : https://www.mediusflow.com/en/untapped/articles/innovation/ap-solutions-in-cloud-vs-on-premise

Citation 3: Fraud Prevention : https://strategictreasurer.com/2017-treasury-fraud-controls

Every organization witnesses a skills gap; 75% CEOs feel their in-house team isn’t adept enough to keep up.Keeping that in mind, it is always helpful to define clear, precise and well-defined workflows and practices in every business process. Here are some tips and best practices to Improve Accounts Payable efficieny. A better Procure to Pay process will not only benefit your working capital, cash flow, and vendor relationships but go the extra mile help you to identify areas of savings and compliance. If you’re looking to strengthen your bottom line performance, what better way than to improve liquidity?

So read on, as we enlist 15 best practices to improve accounts payable efficiency (in no particular order), keeping in mind the organizations where the AP function primarily relies on paperwork submissions. We know some companies have already adopted EDI and we’re going to keep this as generic as possible.

1. Defined Roles and Responsibilities: Assign access rights, or assign specific employees the capacity to add/delete/modify vendors in the vendor master files. Especially in systems that lack the ability to print changes made to the files, this practice can be pivotal in avoiding theft.
2. Use default settings to your advantage: It is recommended that you default the AP master file configuration to a Vendor Type used most frequently. If your system allows for multiple vendor categories, set access rights in a way that users only above a certain security level are allowed to change the GL code.
3. Avoid batch entries: Entering each invoice individually, allows for a separate audit trail and that would greatly help in keeping track.
4. Check the Invoice Dates: Do not let your AP clerks use older invoice dates. Try and understand how your system assigns GL month/year as well. When you generate reports on financial reports for a time period, correct dates will alleviate unexpected results.
5. Review and reconcile: Compare charges to purchase orders while paying out and perform a monthly reconciliation.
6. Automation is better: Manual processes such as expense reporting, data entry should be automated for better utilization of your accounting resources. This will also minimize risks and errors.
7. Try an ERP system: Most of the auditor’s time is consumed in reviewing manual postings owing to an elevated risk factor. This can be eased with the help of an ERP system.
8. Always compare with original: It is advisable to try and pay against the original invoice but if paying from a copy, compare the invoice number and charges indicated.
9. Verify W-9: In the year’s end when you organize 1099s, you don’t want to be stuck in a rut. Before initiating payment, verify the vendor has a W-9 file for them.
10. Invoice number rules: If all your clerks starting entering invoice numbers in the format they please, you’ll be lost for eons; especially if you don’t have an invoice number in hand. Instead, have a policy and educate your clerks on how to enter invoice numbers.
11. Accountability: Assign and authorize separate people for entering the invoice, approving the invoice and signing the check.
12. Logging is key: All invoices should compulsorily be addressed to the Accounts Department – this way they can be logged.
13. Define Budget: It is safer to know your AP team know what the declared budget is, if you are among those who run a lot of cash transactions.
14. Audit trail is imperative: Even if you don’t plan on paying the entire invoice amount, it would help the audit trail to mark it as billed. At these instances, use credit memos.
15. Free is good: Discounts and free goods being offered by your vendors is something that could greatly help your accounts. Watch out for these festive promotions and make the best use of them.

Go the extra mile with these best practices, and watch your AP process go above and beyond maintaining operating margins. Velan is a trusted and seasoned Accounts Payable services providers. Velan AP process takes extra care on available free credits, payable days, purchase order mandates, and Accounts Payable cycle efficiency. Accurate Accounts Payable reconciliation plays a vital role in clearing unpaid bills within the stipulated time. Outsourcing your Accounts Payable management to Velan will help you effectively mitigate fines for late bill payments and ensure that you have a streamlined Accounts Payable process flow leading to optimized of profit for your business. Call @ +1-860-215-4997 to know more.

One of the most popular and favorite segment that is Outsourcing Your Procure To Pay Processes or Accounts Payable processes. It’s pretty simple, why companies do that- P2P processes are completely a transnational one, hence most of the companies would like to free up the time and resources engaged in the P2P process and engage them more in strategic planning for their growth and development. Not only do the companies benefit from the labor arbitrage but also the accessibility to technology, reduced costs, and improved controls.

In the below section we can go through each benefit extensively:

Data digitization & indexing

The need for paper based records have gone down exponentially. Yet there are firms that still operate based on the paper records. BPO companies help you in not just going paperless, but also gain access to your records easily and if you and the BPO have any time difference, you may also have the availability of the records all day every day. BPO companies will extract and index the information of the P2P process and make it available to you.

Improved control

When companies decide to outsource there’s this doubt that every business owner gets at some point in time. Companies are usually skeptical about how they can access their data and check how the service provider performs. Firstly, it is totally up to you to decide the processes to be outsourced. Secondly, BPO companies today employ the advanced technology available to maintain all the operations online. In case something is amiss, the parent company can always raise the issue with the concerned managers. This lets them have complete control over the processes outsourced.

Leverage labor and technology

A good BPO company will ensure that they employ professionals who are proficient in the given field. This gives the parent company a labor arbitrage. Not just employees, outsourcing companies also ensure that they are up-to-date with the latest technology and this gives the parent company to access all the technology available and stay ahead of their competitor companies. They have employees and technology in hand, which often happens to be the go-to point for the parent companies and the benefit the parent company reaps is enormous.

Increased operational efficiency

On one hand, most organizations involving P2P or Accounts Payable deal are the standardization and efficiency lack. On the other, there are these outsourcing companies who focus solely on increasing the operational efficiency of the clients by standardizing and continual improvement of their processes. They will observe your Accounts Payable metrics and revert to you with the report on Key Performance Indicator, which includes the accuracy of the job done, and the time of payments. With these data, you will be able to reduce the problems and exploit opportunities.

Note: It is sensible to outsource to companies that abide by any quality standards like ISO just to ensure that you are delivered with quality work.

Concentrate on core competencies

Basically, when you outsource your Accounts Payable or Procure to Pay processes, you will have ample time to concentrate on your core competencies. The skilled professional, who were initially frittering away time doing some data processing work can devote their talent and time on their core competencies that can develop the business and ensure the growth of your organization.

Should you wish to outsource your Procure to Pay / Accounts Payable processes with the above said qualities, visit www.velan-bookkeeping.com or contact at +1-860-215-4997.