While outsourcing your accounts payable process can yield real savings and free up valuable time for your most talented people, handing over control of some of your most critical business functions is a big step for any company.
This blog reviews typical accounts payable (AP) process steps and the benefits to your business of outsourcing at each stage in your AP invoice processing cycle.
Payments Partnerships: The Benefits of AP Outsourcing
Accounts Payable might not be the most glamorous division of your company, but making sure your suppliers, vendors, and partners are getting paid on time is essential to managing your cash flow and maintaining valuable business partnerships.
That said, effective AP managers know that collecting, tracking, reconciling, and processing invoices effectively day after day is an expensive and time-consuming process. Plus, finding qualified and reliable staff to execute it has never been harder.
Handing over specific parts of your AP process to a trusted managed services partner like ILM Corporation can put smart technology—and a reliable and dedicated team—in your corner. This move would bring tangible benefits to your operations and bottom line, including:
- Reducing AP staffing needs
- Faster payment turnaround time
- Reduced exceptions
- Active purchase order matching and general ledger coding
- Reduced cost per invoice.
ILM Corporation estimates that our dedicated digital mailrooms and artificial intelligence-powered AP systems can reduce your business costs from $8-$10 per invoice for a fully manual in-house process to as little as $2-$3 per invoice. What’s more, the average processing time can be reduced from 10 days to just 2-3 days.
How do we achieve these savings in time and money? Let’s take a look at 7 typical AP process steps and the benefits of outsourcing them.
1. Collecting Invoices
The effectiveness of your entire AP process depends on effectively collecting invoices from paper mail, email, fax, and secure upload. ILM’s extensive digital mailroom experience makes us the perfect partner to automate and streamline this process. You’ll see real benefits since your staff will be freed up from often very manual AP capture tasks.
ILM uses AI-enabled software to scan and reformat all payment requests quickly into a readable data file along with a PDF image. With far less paper to track and a standard process in place, you’ll benefit from fewer errors or late payments—without having to invest in equipment, train new staff, or overhaul your procedures.
Sorting individual invoices by vendor and classifying them by budget line item is essential to reconciling expenses to your budget. ILM’s experience handling AP for a wide range of companies means we have the skills and procedures in place to manage this process quickly and accurately.
4. PO Matching
Any good expense control system is going to require that a vendor be authorized in your payment system with a purchase order (PO) in place for the goods or services supplied. ILM’s robust reconciliation procedures ensure payments are approved only for vendors in good standing, reducing the chance of erroneous payments or fraud.
When invoices and POs don’t match up, our robust exception-handling systems leverage AI to reduce the time taken to resolve these items.
5. Data Extraction
Through a combination of AI and human validation, critical data points (such as amounts, dates, and line item details) are extracted from invoices and placed into a usable data file. This allows for the invoice details to be uploaded to your ERP or accounting system.
6. General Ledger Coding
Line item information is extracted from invoices and the correct GL codes are applied.
Tracking and accounting where expenses should be applied are essential to understand how your organization is spending money and reconciling budgets.
7. Upload Data
The sorted and reconciled payment data, including line items with matching GL metadata as well as images of invoices, are uploaded to your accounting system or ERM system. Copies of all images can also be saved online for easy search and retrieval.
Your End-to-End Payment Partner
ILM Corporation’s robust processes and broad industry experience ensure you’ll get the most from every stage of your outsourced AP process.
- You’ll benefit from the improved accuracy and efficiency of our experienced staff and dedicated AP systems
- You’ll save by not having to invest in and maintain your own in-house AP infrastructure
- You’ll save through a reduction of expensive errors and fraud prevention
- You’ll benefit from value-added business intelligence about your company’s performance
Most importantly, you’ll make the most of your cash flow by paying what you owe on time. This will reap better business relationships and strengthen your company’s reputation.
Click below to learn how you can get the most out of ILM’s industry-leading AP outsourcing for your company.