How to manage accounts payable which helps to run your business smoothly?
Your organization’s account payable can have considerable effect on your general achievement.
This implies you ought to follow modern business practices so as to make a mark
& stay ahead.
First of all you have to pay on time to your vendors or
suppliers. Late payments can result in a number of issues like:
o
Negative
impact on suppliers’ cash flow which may leads to –
a. Supplier Frustration
b. Broken business relationship (which
may leads to less bargaining power)
c. Service disconnection (like cut off
electricity supply/ water supply/ etc)
d. Increase incost of services with
penalties.
o
Damaged
reputation & distrust which can be the reason for destruction of business
as well as you may loose the trust of your suppliers, financial service
providers & potential business partners.
Wouldn’t it be smarter to stay away from all of these issues
& rather put your business in an ideal position, so that it can be easy to
take advantage of some offers like early payment discount…?
Accelerating your invoice payments yields a healthy cash flow
system for your organization. But how can you accelerate your procedures such
that you pay precisely & on time? Which strategies can you deploy to honor
payment terms?
While in some caseslate payments are a result of company’s
poor cash flow, others are unambiguously caused by poorly managed account
payable process.
In this article, we’re going to focus on how to deal with the
latter. Below are the some suggestions on how will you get rid of late payment
penalties forever.
1. Push for an invoicing method based completely on electronic data
interchange (EDI)
You already know that paper invoices
take more time to process. With electronic invoices, you immediately bypass the
time-wasting steps associated with paper invoices.EDI lets you and your vendors
exchange documents electronically, this results in quicker cycle time, and
ultimately, faster payments.
2. Tell suppliers to send accurate invoice data
The invoices with incorrect data
wastes your time to figure out the details, & payment gets delayed.
It makes sense if you can get your
suppliers to send precise invoice data every time. You might provide a
framework that causes suppliers to always send in the complete and correct
invoice data. This will help to reduce the time your team puts into processing
invoices, which means your business will save employee hours and makes payments
on time.
3. Schedule invoices for payment as soon as they arrive
This is very easy to get, still some
accounts payable teams miss this. No needs to wait until invoices are nearly
overdue before processing them. Preparing them from the get-go will only make
it easiest to pay it on time.
4.
Streamline internal communication
The ability to communicate in
real-time boosts efficiency and create means for your team to feel comfortable sharing
ideas. In any case, they should have ability to build strong relationship among
themselves. This helps for faster verification of Invoices (Specially maintenance invoices) with the concerned person and results in accurate payments on time.
5. Use automated systems or mobile apps for monthly payments
You can use automated system which is
an electronic network for all type of financial transactions like ACH (Automated
Clearing House). It gives access to vendors to deduct actual amount as
mentioned in your invoice, you just need to check whether deducted amount and
invoice are verified and matching.
Latest is the mobile app,
which lets you handle these tasks regardless of where you are. The
ability to approve invoices from any location moves things along more quickly.
From eliminating late payments to
preventing errors, automation save you time and money, as it is proven to be
the best solution for Account payable teams looking to optimize how they work.
To get any help from experts please contact us on - (317) 851
0936 or inbox your queries at sales@hybridkpo.com
