For those unfamiliar with the term, or, more commonly, what exactly it means in relation to its purpose in a company, "Accounts payable," or AP, refers to the money you owe vendors who have provided you with goods and/or services on credit. This can include: keeping track of all payments and expenditures, including payroll, purchase orders, invoices, statements, etc., and reconciling processed work by verifying entries and comparing system reports to balances. Those in AP positions are well-aware, and those looking to join AP teams should take note, that workflow process management is crucial to meeting deadlines and keeping the company financial boat afloat. Below, are some basic tips to consider when you are creating or assessing your AP workflow process.
Use tech to simplify and "go green"
If you’re currently using a manual accounting system to manage accounts payable and other financial records, utilizing available technology can help you manage processes and workflows, plus your employees and documentation. You can save time and energy by using an accounting software like QuickBooks or FreshBooks that also sync with a check-writing service like Checkeeper to automate your system digitally from invoice to payout. This allows you to track all unpaid bills and make payments directly with a check or online bill payment so that your accounts payable balance is always up to date.
Some vendors give you the option to receive a paper or electronic invoice. Encourage your suppliers to email invoices so that you can import it into your accounting software. This not only centralizes your information securely, it is an option that helps both you and the environment at the same time.
When possible, set up online payments for your regular vendors and automate the process with an online provider like Checkeeper that standardizes your check-writing process. Checkeeper syncs seamlessly with most accounting software and you can use the site to either print and send your own checks, or use their fulfillment services to have them print and send via USPS on your behalf.
Standardize and repeat
Repetition is key to an efficient accounts payable process. Set up a standardized system for managing invoices from the time you receive a bill to when you pay it. For instance, will you categorize by date? Client name? Department or vendor? Make sure you have a universally applied process so that records, especially invoices and payouts, are easy to sync and access.
Use an accounts payable aging report to manage invoice due dates. An AP aging report helps you see which vendor payments are past their due dates, and puts you and your team on high alert to prioritize and attack before bills slip into dangerous territory.
Set up reminders
To follow your standardized system of workflow process, use a calendar to manage invoice due dates, follow-up emails, etc., and set up alerts that automatically let you know when a due date is approaching. Tip: try to only use one calendar for scheduling. If you have two (for example, you have both Outlook and Google) make sure they sync, so no reminders or due dates fall through the cracks.
Archive your data
One of the best practices in accounts payable process management is keeping track of invoice data. Immediately after receiving billing documentation, save it in an online file. This includes purchase orders, invoices, receipts, and notices from vendors. so you can accurately pay invoices.
Additionally, having an easily referenced registry of checks that have gone out to vendors, consultants, landlord, etc. eliminates worry for end-of-month statements and will be indispensable come tax time. Sites like Checkeeper that provide professional check-printing and fulfillment, store all of that information securely and digitally on the cloud, and can be sorted by payee, date range, and more, for easy reference.
Review your processes regularly
Once you achieve a fast-moving and well-oiled machine with accounts payable, it is time for maintenance. Continually refer back to the main points, above, to review and keep your workflow processes running smoothly and efficiently.