Outsourced Accounts Payable: A Game-Changer for Business Growth?

Accounts payable (AP) services are crucial to the overall financial process. Given the current globalized landscape, opting for the services of a specialized third-party company to handle accounts payable is viewed as a practical and strategic choice. This move can considerably help streamline operations and improve efficiency. Additionally, outsourced accounts payable services can play a catalytic role in being a game changer for business growth. Let us look at how this is possible and how accounts payable outsourcing can be a game-changer and unlock the potential for the sustained growth of your business.  

What Is Accounts Payable Outsourcing? 

Outsourced account payable services involve entrusting your organization’s accounts payable process to a third party. Companies either outsource the full procure to pay process or have us manage any of the functions of the process like: 

• Purchase Order Management  
• Recording Item Receipt  
• Recording Vendor bills  
• Recording Payments  
• Vendor Statement and Balance Reconciliations & Vendor Collaboration.  

 You may outsource your accounts payable to an accounts payable services company due to several reasons, such as: 

• Costs Savings
• Improved Processing Time
• Reduced Burden
• Improved Efficiency
• Specialized Expertise
• Real Time Reporting 

The increase in outsourcing can be attributed to several factors, such as a sustained need to save on costs and increasing labor shortages. This has spurred companies to embrace business process outsourcing (BPO) and accounts payable outsourcing as a strategic solution to overcome crucial economic conditions. But, before we proceed, let us look at some of the services that a typical outsourced accounts payable company provides: 

Purchase Order Management: By implementing robust purchase order management systems, businesses can streamline their purchasing processes, ensure compliance with company policies and regulatory requirements, and optimize inventory levels. We assist companies with the processing of this step by: 

• Requisition  
• Creation of Purchase Order 
• Approval Workflow 
• Order Fulfillment & Item Receipt 
• Recordkeeping and Reporting 

Processing vendor Invoices & Bills: Vendor bills processing is a crucial aspect of managing finances in any organization. It entails receiving invoices from vendors, meticulously verifying their accuracy against purchase orders and receiving documents and obtaining appropriate approvals before authorizing payment. It would mainly include: 

• Receiving Electronic Copy of Vendor Invoices 
• Matching Invoices with Purchase Orders 
• Accurately Recording These Bills Within the Accounting Systems 
• Coding & Allocation 
• Authorization Workflow 

Payment Processing: Payment processing is one of the most critical elements of Accounts payable outsourcing service. This process would include: 

• Payment Approval
• Payment Scheduling
• Payment Execution
• Transaction Recording
• Reconciliations
• Real Time Reporting    

Vendor Management: Outsourcing this function to an accounts payable services company can help maintain healthy vendor relationships, which is essential for your business’s overall growth. On the contrary, poor vendor management can lead to wrecked relationships with vendors that can affect key contracts and, ultimately, the overall business. 

Schedule a consultation today and discover the power of outsourced accounts payable.

Should You Outsource Your Accounts Payable Function? 

Even today, most businesses use outdated and expensive systems to manage their AP processes. This could be a problem due to several factors, including losing out to competitors who use more productive and other e-automation tools like Bill.com, Stampli, Ramp etc. Now let us look at the strategic beneficial aspects of outsourcing the AP process so that you can focus on more complicated and intricate elements of your business: 

Benefits of Hiring an Accounts Payable Outsourcing Service 

Outsourcing the accounts payable function can provide your business with many benefits. This includes tangible benefits such as cost savings, improved efficiency, and enhanced visibility and control. Let us examine these benefits in brief here and how such benefits directly impact your organization’s bottom line: 

Cost Savings:

One of the reasons why AP outsourcing is more popular is because of the immense potential for cost savings. This means enormous benefits such as reduced invoice processing costs, increased vendor discounts, and increased savings on recruitment and training costs. Highly skilled professionals can be made available at short notice, which proves to be less expensive than the costs involved with maintaining an internal AP department. 

Improved processing time:

Outsourced accounts payable (AP) services leverage advanced automation technologies, reducing manual data entry and processing errors. This streamlined approach accelerates invoice handling and approval workflows, significantly cutting down on processing time. Additionally, outsourcing allows businesses to tap into specialized expertise, ensuring efficient and timely AP operations through dedicated professionals. 

Reduced Burden:

Outsourcing the accounts payable (AP) services function alleviates the administrative burden for businesses by streamlining and managing financial transactions externally. This reduction in workload allows companies to focus on core competencies, fostering operational efficiency. With expert AP professionals handling invoice processing and payment tasks, organizations can achieve cost savings, improved accuracy, and enhanced overall financial management 

Improved efficiency:

Outsourcing the AP function can help streamline workflow and reduce the time spent on mundane tasks such as data entry and invoice processing. This means a significant improvement in efficiency and increased profitability of the business. Increased efficiency also means a healthy relationship with vendors as late payments are avoided, leading to smoother financial operations.  

Specialized expertise:

Outsourced accounts payable (AP) services offer businesses access to specialized expertise in financial management. These professionals possess in-depth knowledge of the latest industry regulations and best practices, ensuring accurate and compliant processing of invoices. By leveraging their specialized skills, companies can streamline their AP processes, reduce errors, and focus on core business activities. 

Ready to boost productivity? Let’s talk about outsourced accounts payable.

Real time reporting: With the help of Outsourced accounts payable (AP) services, businesses get the advantage of real-time reporting, ensuring timely and accurate financial insights. By leveraging advanced technologies and dedicated teams, these services streamline the AP process, allowing for immediate access to transaction data. This swift reporting not only enhances decision-making but also promotes transparency and efficiency in financial management.