Accounts Payable Outsourcing: The Complete Guide

AP automation uses business intelligence software to manage your in-house systems (with lower total costs on your part). A company that outsources its accounts payable may grow dependent on a third-party firm. This dependence is risky, especially if the outsourcing partner suddenly faces bankruptcy or security breaches. Using outsourcing firms for automated AP tasks may increase the profitability of your business and lower costs. That is, if the pricing for outsourced bookkeeping and accounting services is cost-effective.

Choosing a reputable third-party processor is an essential step in reaping the benefits of outsourcing your AP tasks. Outsourcing your accounts payable functions can give you the flexibility to quickly scale up or down, depending on changes in business needs. If your business is making do with paper invoicing and optical character recognition (OCR) to manage your AP processes, you already know the challenges of outdated systems.

1. Selecting the right accounts payable service provider is critical to ensure a successful partnership.
2. AP Automation, in comparison, is the adoption/integration of an AP software to extract, validate and approve accounts payable invoice processes.
3. With decades of experience and hundreds of clients, Plumb is here to support you as you take your business to the next level.
4. For example, back-office employees don’t have to spend hours on manual data entry, recording disbursements and bookkeeping.

By selecting a reliable provider and implementing additional security measures, businesses can reduce the likelihood of data breaches and financial losses. To streamline your AP processes, your data submission systems will need to be updated. Ensure your employees are up to date with these to avoid errors or duplication.

Invoice receipt and processing

The improved efficiency mentioned in the previous point will lead to savings in several areas, such as reduced invoice processing costs and increased vendor discounts. Genpact provides a comprehensive range of AP outsourcing services, including invoice receipt and processing, vendor management, and payment processing. They strive to offer cost savings, improved efficiency, and increased visibility and control for their clients.

This is like having extra sets of eyes on all of your vendor invoices before payments go out. The rules-driven nature of accounts payable processes make these procedures appropriate for third-party management. The assigned outsourced personnel are focused solely on a company’s accounts payable systems. With accounting fraud a global concern, we provide best practices and technology to help you strengthen your internal controls and ensure audit readiness, including robust SOX controls for public companies. As a back office function, optimizing accounts payable (AP) often takes a back seat to other priorities. When choosing an accounts payable outsourcing company, it’s important to consider factors such as the provider’s reputation, track record, and the types of services they offer.

Your AP process lacks controls

There’s little doubt that accounts payable outsourcing and automation improve your organization through higher cost savings, better pricing, increased profitability, greater efficiency, and better data insights and tools. Automation offers all these outcomes without sacrificing the security or visibility of your AP process. Third-party AP service providers offer professional teams and the latest software to do the job.

Accounts Payable Outsourcing: The Complete Guide

They offer a range of technology, personnel, and value-added consulting services to help manage your accounts payable processes more efficiently. Some of the most frequently outsourced processes include invoice receipt and processing, vendor management, and payment processing. Adopting outsourced accounts payable services introduces a new level of efficiency and productivity, thanks to the advanced technologies and automated processes of specialized firms.

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If this is the case, a small error turns into a huge hassle that goes unresolved for days or weeks. Identify if the outsourced solution is leveraging complete AP automation or manually keying in data. AP software can also increase timely payment processing with automated triggers in the matching and approval process. Late payments and lack of communication mean your account payable needs an overhaul. Accounts payable involves current liabilities like short-term debts to vendors and suppliers for goods and services purchased on credit.

But organizations also need to look beyond the lowest cost to ensure their partner provides significant cost savings while also driving the highest productivity and performance. In bottom-performing departments, late payments are all too common as invoice approvals drag for days and AP staff waste about a quarter of their time chasing down missing or inaccurate information. Finance & Accounting unemployment levels have also reached record lows in the U.S. – increasing wages and driving high turnover that impacts consistency and errors. We are here to help guide you through the outsourced accounting process and to answer any questions you may have. With decades of experience and hundreds of clients, Plumb is here to support you as you take your business to the next level. Fully Accountable is a full-service eCommerce accounting firm offering outsourced finance and accounting for eCommerce and technology companies.

When you outsource AP tasks to them, you gain access to excellent tools such as computer systems complete with customized invoicing, expense management, and other accounting software. When a business decides to outsource its AP, a third party manages the AP department. Third-party accounts payable outsourcing services will typically use their own AP automation software to achieve efficiency. Accounts payable outsourcing offers a pathway https://intuit-payroll.org/ for companies to enhance efficiency, reduce costs, and focus on their core business activities. By selecting the right partner, leveraging technology effectively, and managing the outsourced relationship strategically, businesses can transform their accounts payable function into a source of competitive advantage. AP Automation, on the other hand, refers to the use of software to automate AP tasks within the organization.

AP outsourcing companies don’t just follow best practices when doing their work. They incorporate technologies that identify errors before they become liabilities. However, those businesses which can incorporate automation, e-invoicing, and other efficiency tools will gain an edge over their competitors. They’ll even negate many of the problems that have plagued AP departments for decades. And with many North American organizations having established operations in the region, there is a large talent pool that is familiar with US operational requirements, schedules and pace.

Although the technology is not designed to replace humans completely, it complements the people you already have and creates a higher level of efficiency. Technology can take it a step further with accounts payable software that automatically screens for duplicates the second the invoices are scanned, and before data capture. Accounts payable automation software is a SaaS add-on to your ERP or accounting system.