Business

5 Ways to Stay on Top of Your Accounts Payable Process

5 Ways to Stay on Top of Your Accounts Payable Process

Accounts payable can be a daunting task. You will need to stay on top of your invoices, check your vendors regularly and file or pay them, as necessary. However, if you are juggling a million other things at once, it is almost impossible to keep track of all this information. As a result, many businesses end up with unpaid invoices that lead to overdue payment fees and other more serious problems further down the line. Fortunately, there are ways to stay on top of accounts payable – even if you run your business from home and have several distinct roles all in one person. Staying organized is key. Here are some tips for staying on top of your accounts payable process so you will not be caught off-guard again:

Set reminders for recurring tasks

Even the best employees can let things slip from time to time, so you will need to set up reminders for recurring tasks you need to complete regularly. For example, if you need to send an invoice to a certain vendor every month, you will want to put a reminder on your calendar, so you do not miss it. Likewise, if you have certain expenses you need to pay every month, you will want to set up reminders, so you do not forget. If you have multiple people who oversee accounts payable at your organization, make sure each person sets their own reminders, so the team stays on track.

Always use checklists

Keeping a checklist of everything you need to do with your accounts payable process can help you stay on top of things. For example, when you receive an invoice, make sure you check it against the original document to make sure everything is accurate. You can also add a checklist to the purchase order process, so you do not forget to check to see if your vendors offer discounts. If you work with several different vendors, you might want to create a different checklist for each one, so you do not get overwhelmed. You can also create a general accounts payable checklist to help you stay on track. For example, make sure you pay your health insurance providers before you pay your other vendors. You will also need to keep track of all the invoices you receive from your vendors, so it is a clever idea to start a folder for each vendor where you can keep track of their invoices. You can use a spreadsheet or a vendor management system to keep track of all this information.

Use automation to help you out

If you have recurring invoices, you can use automation to help you out. For example, if you have an insurance company you need to pay every month, you can set up automatic payments through your financial institution, so you do not miss that payment. However, you will want to make sure your bills do not exceed your available balance to avoid overdraft fees. Likewise, you might want to set up automatic payments for your vendors who provide regular services so you do not get behind. For example, if you pay the same amount to your internet provider every month, you can set up automatic payments to make sure you do not miss the due date. However, if you pay one-time expenses like contractors, you will want to send checks for those as soon as you receive an invoice.

Rotate employees to shake up your routine

While it is important to keep your accounts payable process flowing regularly, you may find that you get into a regular routine that is hard to break out of. You might notice that you are always paying your utility bills at the same time each month or that you always send out invoices on the same day every week. In fact, you may even notice that you are always sending out invoices on the same day every month. To shake up your routine, you can assign different tasks to different employees every month. This will help you get out of your regular routine as well as help you find out what each team member is best at so you can focus your hiring efforts on people who excel at the tasks they are assigned.

Hire an AP automation service

If you are having trouble staying on top of your accounts payable process, you might want to hire an AP automation service. These companies review your invoices, purchase orders, and send you reminders when you need to pay a vendor. Although these services can be helpful, you will want to make sure you are keeping track of your expenses. If you are not tracking your expenses, you will not know where you are spending the most money. Likewise, if you have auditors coming in, you will need to have records of everything, so you do not end up with a fine. If you hire an AP automation service, make sure you have a record of each invoice so you can dispute the charges if necessary. You will also want to make sure the company has proper security protocols in place to protect your information.

Conclusion

Accounts payable takes a lot of work, but it is an essential part of running a business. If you want to succeed in your business, you must keep up with your accounts payable process. Luckily, there are plenty of ways to stay on top of your accounts payable process, so you do not lose money to late fees or other penalties. You can set reminders for recurring tasks, use checklists, use automation to help you out and hire an AP automation service.