Accounts Payable Outsourcing: The Complete Guide

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. With its extensive experience and a strong presence in the US, Accenture offers valuable support to businesses seeking to optimize their accounts payable processes. They provide a range of services, such as invoice receipt and processing, vendor management, and payment processing, ensuring timely and accurate payments for their clients. One of the biggest benefits of outsourcing accounts payable processes knowing your customers is the potential for significant cost savings.

1. Efficient invoice receipt and processing can lead to cost savings and improved accuracy, reducing the likelihood of manual data entry errors and facilitating better cash flow management.
2. Additionally, when you own your own AP process you can turn accounts payable into a strategic partner for your business.
3. Of course, this rapid change in processes can cause problems in-house, especially if your employees are used to your old procedures.
4. In addition to invoice receipt and data capture, ILM also offers services such as PO matching, invoice processing and routing, disbursement, accrual, general ledger, and archiving functions.

In addition, you’ll enjoy the same availability of your data, the same control over compliance workflows, the same detailed invoice and payment tracking, with the same standardization of your AP process. Instead of changing the system, they require more and more people to manage it—to perform data entry, to track down each approval, to catch human errors. Plus, an accounts payable service or organization can serve each customer in a fraction of the time because they’re specialists.

Outsourcing accounts payable has become a popular business practice for many firms that lack the capability and means to handle their growing AP processes. Many outsourcing firms far and wide are available to offer a multitude of services. Accounts payable outsourcing is the process of hiring a specialised service provider who can take over multiple AP functions that businesses find difficult to handle in-house.

Accounts payable outsourcing vs accounts payable automation

A business can opt for what it wants to outsource depending on the magnitude of work and budget involved. An accounts payable outsource company can have certain terms and conditions what is form 1120 which may not make work flexible for your business. If a contract with the vendor does not cover exceptions in processing, then your business has to deal with it separately. Outsourcing companies may not always be transparent in how they deal with your AP processes. Also, changes in your processes may not be fully implemented by outsourcing companies handling your AP processes, resulting in more errors or rework.

Sara Grafals of Speedway Motorsports Embraces Automation

Most businesses still use outdated and expensive systems like optical character recognition (OCR), or even paper invoicing, to manage their AP processes. When choosing to outsource AP, a company will need to hand over their historical data as well as any in-house documents, which some might find concerning. Its always best to research a provider’s privacy policies and security measures before engaging with them to make sure they meet your privacy requirements. Professional outsourced companies will incorporate advanced technologies, systems, and processes in order to identify, remove, and mitigate any errors before they become an issue. Ensure that the provider adheres to the relevant industry standards and regulatory requirements.

The Pros of Outsourcing Accounts Payable Processes

Skilled outsourcing providers can make a company’s AP processes more efficient; thus improving the cash flow. To acquire the resources necessary to streamline their internal processes, small and medium-sized businesses often turn to accounts payable outsourcing companies to fill the gap. Outsourcing accounts payable offers unparalleled scalability, allowing businesses to adjust their AP operations in alignment with their growth trajectory and seasonal demands. This flexibility negates the need for internal staffing adjustments, which can be both time-consuming and costly. Automation offers all these outcomes understanding real vs. nominal interest rates without sacrificing the security or visibility of your AP process. Third-party AP service providers offer professional teams and the latest software to do the job.

Invoice receipt and processing

Time zone differences, language barriers, and miscommunication can potentially impact the efficiency and accuracy of your accounts payable operations. However, it’s essential to carefully consider the pros and cons of AP outsourcing to determine if it aligns with your company’s unique needs and financial goals. You’ll benefit from the performance improvements of automation whether you keep your payable processes in-house or hire a professional. More and more businesses rely on AP outsourcing firms to redesign and streamline their AP processes despite mild hiccups along the way.

Other companies prefer to adopt new technology and processes in-house rather than hand control of their operations to another organization. This frees your in-house AP department to focus on higher-level tasks and attend to the core business processes that enhance your company’s performance and improve service levels. Once you’ve identified the need for outsourcing, it’s time to evaluate potential service providers. Look for experienced providers with a proven track record in accounts payable outsourcing. This provider, often referred to as a Business Process Outsourcing (BPO) firm, handles various AP functions, including invoice processing, vendor payments, expense management, and reconciliation.

This includes not only processing invoices but also managing payments, ensuring compliance, and handling vendor queries. Providers with experience in your industry or similar business sizes can offer tailored solutions that better fit your needs. The decision to outsource accounts payable is a strategic one that depends on your organization’s unique needs, resources, and goals. Weigh the pros and cons carefully, considering factors such as cost savings, expertise, and data security. One of the primary benefits of outsourcing accounts payable is the potential for significant cost savings. When you outsource, you eliminate the need to hire and train in-house staff to handle these tasks, reducing labor costs, employee benefits, and overhead expenses.

With automated tracking in place, businesses can gain real-time access and information on their account payable processes. Companies offering accounts payable services focus only on your AP processes; completing the work faster and more accurately. Also, with AP processes being taken care of, your employees can focus on higher value tasks with increased efficiency leading to better productivity overall. For many firms, the AP personnel tasks are not always as integrated into the business as another function such as operations, so it can be an attractive offering to outsource some of the paperwork.