Large companies are often bogged down by bureaucracy, red tape, and outdated processes, particularly in areas like their accounts payable department.
Accounts payable has long been a headache for mid-sized and large companies, yet so many of them still stick with the outdated methods of check-writing and using Excel documents for tracking.
Even large companies that may be modernized in nearly every other way tend to be lagging when it comes to updating their accounts payable department, and as a result, they’re spending more time and money than is necessary.
The following are some of the best ways to streamline your AP department and make it more efficient this year.
Evaluate The Tools You’re Using
Is your AP department doing everything manually and using Excel or outdated filing and tracking systems? If so, one of the best things you can do in the name of efficiency and cost savings is to instead choose AP automation software.
It’s best to choose a scalable automation solution because some features don’t make sense for every company. For example, it might not be the case that your company requires complete automation, but there’s almost no scenario where no automation is the right solution either.
Also important to consider when looking at your tools is the fact that the use of paper documentation is always going to slow down the approval process. It’s better to choose a platform with a centralized, customizable dashboard that allows for faster approvals without the traditional hurdles that come with an outdated AP system.
Audit How Employee Time Is Being Spent
Are your AP employees spending time doing monotonous, repetitive activities, rather than focusing on core value-creating tasks?
Sometimes AP departments can get into such a routine with the tasks that employees are doing that it’s tough for them to see where redundancies or inefficiencies exist.
It’s a good idea to do a yearly audit and see just how employee time is being spent, and where automation software could eliminate unnecessary tasks for key employees.
Train Employees on Expense Reports
One of the biggest problems plaguing AP departments is often that employees simply don’t know how to complete expense reports or they’re not doing it correctly. It’s key that you train employees on how to do this in the most effective, efficient ways possible.
Consider an AP solution that allows them to manage their expense reports on their mobile device.
This makes it not only easier for employees to track expenses and submit them properly, but it can also speed up the approval process.
Be Clear on Payment Terms
Finally, if you’re unclear on different payment terms for different vendors, it can lead to lags in payments, communication problems, and ultimately relationship problems with these key vendors.
Regularly check in with vendors on their payment terms and make sure you’re clear on them and that they’re incorporated into your AP system. You always want to meet obligations as efficiently as possible, because supplier relationships are essential to the success of a business.
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