Staff shortages are at an all-time high and that can make it hard to find the people you need to do the essential work in your back office. Accounts payable outsourcing can help. Let’s take a look at what an accounts payable service is and the benefits it can offer your company.
AP Outsourcing: Back Office Help to Put You Out Front
Like many businesses, your company is probably scrambling to find the people you need. With all hands on deck, it can be easy to neglect the essential services that keep your company running smoothly. Accounts payable outsourcing can take care of the tedious tasks of capturing and entering invoices into your ERP, so you can focus on what you do best.
What Is an Accounts Payable Outsource Service?
Most businesses operate by buying goods and services on credit and paying back suppliers in an agreed period. Your accounts payable (AP) office works to capture and enter invoice information into your accounting system so you keep track of outstanding invoices and make sure they are all paid on time. That drives the steady cash flow that is essential to your business’s success.
Accounts payable outsourcing involves hiring an outside service to manage your incoming invoices for you. At a minimum, AP outsourcing services offer:
- Invoice receipt via mail, fax, email or upload
- General ledger coding, and
- Vendor and Purchase order matching.
Why Should You Hire an AP Outsourcing Service?
Few people start businesses so they can pay bills. Managing supplier inquiries, reconciling invoices with purchase orders, and figuring out exceptions can quickly become overwhelming. You and your staff can find yourself spending more time managing paper than taking care of your customers.
In fact, according to a 2019 study performed by Ardent Research, the time to process a single invoice is 8.3 days and costs $10.08 per invoice. Moving all these functions off your desk can free you up to do what you are really good at.
For many companies, this alone is a big step forward. On top of this, hiring a specialist company to take care of your back office operations can come with a range of related benefits.
Dedicated accounts payable services have one job: handling accounts. Your service should have the tools and know-how to streamline your business processes so this happens more quickly and efficiently with fewer exceptions, errors, or overdue accounts.
Reduced Costs Per Invoice
Whether you were handling the accounts yourself or employed part-time or full-time staff, hiring an AP service should drastically reduce your costs per invoice. Those are expenses that are tagged onto every bill even before it gets paid including staff costs, phone calls, additional bank fees, and interest payments — even travel expenses and printer toner.
Yes, less paper on your desk. Research shows that just managing the mountains of paper that build in an operating office is a major source of stress and inefficiency. With warehouse space at a premium, an AP service might even enable you to free up some valuable square footage.
Reduced Turnaround Time
Smart business means paying when you have to and never being late. Reduced turnaround times help to maintain good relationships with your suppliers by making sure everyone gets paid on time. It also means queries or exceptions are resolved promptly. Exceptional partners should reduce the turnaround time to process an invoice in as little as 3 days.
Better Ledger Control
Your budgeting is only as good as your general ledger control. Efficient general ledger coding ensures accuracy and consistency so you know where your money is coming from and where it is going. A good AP service like ILM can make your ledger work for you.
Catching errors or exceptions in invoices at the beginning of the process not only speeds up time but increases accuracy. Performing purchase order and vendor matching from inception using sophisticated AI and machine learning software will make for a smoother routing of the invoice for payment.
A digital mailroom service captures all your incoming mail as electronic files. It’s the first step to automating not only purchase order matching and exception processing as well as online general ledger coding. Digital mailroom also encompasses the capture of faxes and emails and conforming everything into one standard digital format such as PDF.
At ILM, we know good data is the key to successful outsourcing. We use advanced AI to ensure scanning of your incoming invoices is completely accurate.
Better Security and Fraud Protection
If money is missing that shouldn’t be missing, a properly run accounting system will pick it up fast. Accurate accounts protect you and your staff and increase trust in your workplace. Handling all your accounts through a single, consistent system should protect you from shrinkage, identity theft, and fraud.
Better Exception Handling
Need to know when you didn’t get what you paid for or were unable to deliver what you promised? ILM’s AP services can help you figure out where things fall short. Good account keeping can turn time-consuming headaches into useful, actionable information.
Better Business Intelligence
Efficient, consistent record keeping can be a mine of useful information about how your business is doing.
ILM can deliver accurate consistent information about your accounts payable and other business processes that can identify weaknesses and threats to your business as well as opportunities to grow or expand into new markets.
Good information gives you the power to get better at what you do.
Simple, Smart, Convenient: AP That Works For You
ILM Corporation’s account payable automation and outsourcing services are designed to reduce the time, cost, and headaches of constantly capturing invoices and tracking payments. We take over your company’s accounts payable digitization, exception handling, and data entry to help you improve efficiency and reduce costs per invoice.
As a leading document management company, we offer:
- Advanced AI for accurate invoice scanning
- PO matching to ensure correct payments every time
- Out-of-the-box integration with most ERP systems, and
- Accounts payable process analysis and optimization.
Click below to learn more about how our Accounts Payable Services can help you pay your bills on time while spending more time doing what you do best.