Accounting Outsourcing: How to Hand off Your Financial Tasks With Recommendations

There’s nothing worse than conducting an accounts payable audit and discovering errors. Depending on the rules that govern your industry, errors could even lead to compliance issues. As the business world expands and supply chains stretch farther and farther across the globe, payments to vendors and other service contractors are becoming even more complicated. Even small businesses must rely on vendors in numerous locations to deliver their products and services to customers. Although some of the differences related to these costs are based on the organizations’ industries, organizations that had adopted accounts payable automation tended to see reduced costs. Before implementing a move to outsourcing or automation, get your data in order to ensure you begin your new program with a clean slate.

• It will depend on your specific needs, but outsourcing could run in the ballpark of $2000–$3500 per month.
• It’s not at all uncommon for AP departments to become completely overwhelmed by their workload.
• By ensuring timely and accurate payments to your vendors, your organization can benefit from improved cash flow management and reduced invoice processing costs.
• Offer suggestions around researching the privacy policies and security measures prior to engaging with the outsource partner.
• But this is often a huge expense for smaller businesses and difficult to scale as businesses grow.
• To help you start your search, we’ve listed our recommendations for the top three companies offering accounts payable outsourcing.

Improved Cash Flow Management

AP software immediately scans the system for duplicate invoices and rejects anything that looks similar. It’s like having a separate set of digital eyes constantly scanning your entire database to avoid any issues down the https://www.bookstime.com/ road. AP automation software is also designed with features that allow for scheduled payments. If you have recurring purchases or need payments to go out on a certain date, the system can be set up to accommodate you.

Finding Small Business CPAs: Tips Before You Choose

When faced with inefficiencies in your Accounts Payable operations, you may wonder whether to opt for automation or outsourcing and what sets these approaches apart. If you truly just don’t want the headache of accounts payable and you’re willing to accept some of the limitations listed above, then outsourcing may be a good fit for you. Too many outsourcers treat transition as an afterthought, but it sets the foundation for long-term success.

Knowing how to outsource your Accounts Payable lets you focus on strategic priorities

When opting for outsourced accounts payable services, businesses benefit from the wealth of resources and automation tools readily available at the disposal of service providers. These comprehensive solutions encompass software, document management, and robust reporting tools. Notably, AP automation is seamlessly integrated into this package, unlocking significant value across various accounts payable processes, such as invoice processing, ERP integration, and payment and remittance management. Efficient payment processing is another key service provided by accounts payable outsourcing companies. By ensuring timely and accurate payments to your vendors, your organization can benefit from improved cash flow management and reduced invoice processing costs.

Evaluating Potential Providers

Accounts payable automation refers to implementing software solutions designed to streamline and automate accounts payable processes within your organization. Businesses can reduce manual data entry, minimize errors, and improve overall efficiency by automating tasks such as invoice receipt, processing, and payment. For example, AP automation can lead to a 49% cost savings for invoice processing. Accenture is a global professional services firm renowned for its expertise in providing a wide range of outsourcing solutions, including accounts payable outsourcing.

This is different from notes payable, which are formal debts written in legal documents.

Accounts Payable Automation (also known as AP Automation)

For example, back-office employees don’t have to spend hours on manual data entry, recording disbursements and bookkeeping. Most businesses still use outdated and expensive systems like optical character recognition (OCR), or even paper invoicing, to manage their AP processes. Effective communication and customer support are crucial for a smooth partnership.

• It would be wise to identify if the outsourced solution is leveraging complete AP Automation or manually keying in data for any step in the process.
• It also frees up your in-house AP departments to focus on higher-level tasks and core business processes.
• Also, don’t be disconcerted when outsourcing AP and they have eyes into your financials; a loss of privacy is one drawback and vulnerability when it comes to accounts payable internal controls.
• This may involve refining processes, implementing new technologies, or adjusting the scope of outsourced services to align with evolving requirements.
• Whether you’re a seasoned executive or new to the concept, this guide equips you with the essential insights needed to make informed decisions about optimizing your AP processes.

In contrast, onshore solutions (US-based) bring the highest costs and typically high turnover from workers who generally often see transactional tasks as beneath them. But many U.S. companies initially lured to offshore locations like India and the Philippines by bottom-of-the-barrel pricing are also rethinking their strategy. Accounts payable outsourcing and accounts payable SSC are usually seen as similar options offering almost identical models to businesses, but there are also some notable differences to clarify here. Regular audits and assessments should be conducted to verify the provider’s compliance and security practices, ensuring that they align with the organization’s policies and industry best practices. Despite the myriad benefits of outsourcing your AP processes, it may not be the best choice for you. You may have hesitations about working with a third-party, or it may not be a reasonable choice in your industry.

What is outsourced accounting?

However, some practices can be followed to ensure that businesses partner with the proper accounts payable outsourcing provider. Look for a provider with extensive experience in accounts payable outsourcing services and a deep understanding of your specific industry’s nuances and best practices. An experienced provider will have a proven track record of successfully managing AP processes for businesses similar to yours, allowing them to anticipate potential challenges and provide tailored solutions. Outsourcing accounts payable processes can result in a loss of direct control over managing financial transactions and vendor relationships.