Smart Streamlining of Account Payables
For any organization, Accounts Payable (A) is an important indicator of the smooth functioning of the working capital that a company has. The operational efficacy of a company can also be judged by state of its AP. Anything too high and there is a possibility that an organization is lagging behind when it comes to paying bills and this can result in expensive penalties. Anything too low could mean that your company may be paying its bills much before it should be and thus losing out on grace periods that are a part of transactions and the benefit of reinvesting excess cash in hand back into the company.
A company’s AP levels are also indicative of financial performance covering a range of parameters from days payable to the balance between assets and liabilities. In order for an organization’s APs to fall in place, it is necessary that some best practices be put in place. This process should be able to handle:
· The entire volume of invoices that a company must handle on a daily basis.
· Processes related to business expense management
· Purchasing cards and their management
· Vendor management
· Payment processes
· Consolidation of month-end finance activities
Such activities must also take into account the fact that invoicing and expense management are almost never consistent on a regular basis. The software put in place should be reliable enough to expand its functioning to manage such changes in a timely and precise manner.
Why timely? In order to build sustainable AP levels it is important to be consistent over a long period of time. Timeliness also builds goodwill among all stakeholders — from management to employees and ensures a smooth functioning of your organization. Precision is also as important because it helps establish credibility, removes redundancies in the system and weeds out unnecessary expenses and penalties. Perfect indexing and processing of invoices will lead to smooth working on multiple levels.
A simple way to AP management is the use of an expense management software that takes into account the specific working needs of your organization. Such a software / A software like Happay can:
· Streamline all your vendor payment processes irrespective of volume
· Handle complex AP requirements with ease
· Provide seamless Cloud-based systems of functioning
· Ease processes for payee inclusion
· Smoothen tax form and invoice collection
· Speed up approvals and payment method (as well as currency choices when needed)
· Facilitate easy global remittances
· Provide consolidated communications with vendors
· Provide well-collated information for research, tax filing or report preparation
Managing AP levels is critical to the financial as well as operational success of your company. Trusting your AP to a software designed to bring in the best systems makes it an ideal course of action.