Outsourcing accounts payable is a process in which you, as a business owner, choose to outsource your accounts payable management to an external service provider/bookkeeper. This allows you to focus on your core competencies, while the outsourced bookkeeper manages the accounts payable process.
They would typically handle the entire accounts payable process, including invoice processing, payment processing, vendor management, and reporting. Outsourcing AP, can help businesses save money by reducing or eliminating the need for in-house staff to handle these tasks. Additionally, the outsourced bookkeeper can provide valuable insights and analytics to your business, allowing you to make better decisions and improve your financial performance.
Wait, what exactly are accounts payable?
Accounts payable is a term used to refer to the amount of money that your company owes to suppliers, vendors, or other businesses. It is a liability on your company’s balance sheet, typically paid off over time with either cash or credit. Accounts payable is a critical component of your company’s financial health, as it measures how much money your company owes to its creditors. It is essential to manage your accounts payable in order to maintain a good credit rating and to ensure that you are able to pay your suppliers and vendors in a timely manner.
Outsourcing accounts payable can provide a number of benefits to your business. It can save time and money, allowing you to focus on your core operations, and growing your business. It can also reduce the risk of errors and fraud, as well as provide access to the latest technology and best practices. It provides your business with access to an experienced professional who can help to ensure that all accounts payable processes are performed accurately and efficiently.
The primary benefit of accounts payable outsourcing, however, is cost savings, as the costs associated with accounts payable processing can quickly add up. By outsourcing this process, you can reduce the amount of time and resources spent on managing the manual processes of accounts payable. This can lead to significant savings in labour costs, as well as the costs associated with managing and maintaining accounts payable software. All of these advantages can help businesses to save time and money, while also improving their overall financial performance.
Challenges of in-house accounts payable:
If you’re trying to manage the AP processes on your own, or have someone on your staff (in-house), you/they are most likely getting overwhelmed, especially if you’re a small business with piles of invoices coming in each day. The top challenges holding AP back are exceptions to the usual rules, lengthy invoice approval times, and too much paperwork. Another big challenge is the amount of time staff spend handling supplier enquiries. By not solving these tactical and manual-based issues, companies cannot expect to extract value from their AP departments, which means lowering processing costs, improving workflow, driving back office efficiency, and making better-informed decisions, all fall to the wayside.
Outsourcing the AP function is becoming more and more common as companies realise they can improve operations without making an in-house investment in technology. Being stuck with AP operations that are manual, time-consuming, prone to errors and lack visibility, will not enable future growth and will only create more problems down the road. Outsourcing accounts payable removes those challenges and positions your company to compete and thrive in the current business environment.
At Project Seven, we offer comprehensive bookkeeping services that can help you streamline your accounts payable operations and optimise cash flow. With our experienced professionals, we can help reduce paperwork, verify data, ensure accuracy and compliance and maximise efficiency. Contact us today to learn more about how we can help you make accounts payable outsourcing a success.
