Do you know what is among the highest-stakes tasks for modern businesses? Well, it is calculating the accounts payable and getting it settled. Luckily, you can manage your invoices and send them out promptly with online invoice payment processing software. This will also help you maintain good relations with your clients.
Also, a good accounts payable system will ensure that you don’t have any liabilities on your books. Even if you are on a tight budget, invest in a free receipt maker app to get your system sorted. Before we move on to the tips to manage the accounts payable process, let us know more about what it is.
What Does Accounts Payable (AP) Actually Signify?
Accounts payable is basically the sum total of money your business owes to creditors. From freelancer payments to leases, loans, and other debts, accounts payable covers it all. Usually, these are debts you plan to clear within a year.
At the same time, long term debts like business loans, mortgages that have a time period of 12+ months are separate liabilities and don’t come under accounts payable.
Since AP is a liability for your business, you must manage it responsibly. Besides, paying off your debts will help you gain confidence to grow your business and even build good terms with creditors.
Steps To Follow In The AP Process
Using online accounting software lets you break the process into three steps.
1. Complete The Purchase Order
In this step, you define the items or services you need to purchase as well as their price. You can also choose to include the terms and conditions and the timelines for delivery.
2. Process Reports
Once you have set the list of items you need to purchase, it is time you add all these details in your online accounting software and send it to your suppliers. Post that you need to double-check if they align with you or make changes if needed.
3. Send Supplier Payments
When your supplier sends the invoice, match it with entries in your free receipt maker app and then proceed to make the payment. Also, check if all goods and services have been received and if all items are in a good state.
Ways Avoid Fraudulent Practices in AP Process
Unfortunately, accounts payable is one area full of frauds. The huge amount of money involved makes it a lucrative opportunity for fraudsters.
Luckily, a free receipt maker app can help you prevent many errors. So, here are some tips to prevent fraud and make the best of your online accounting software.
1. Centralize Payments
Whenever you process invoices, make sure you make it from a single account only. With your online invoice payment processing software, you can set it up easily and even set recurring payments. Avoid making ad hoc payments at any cost or using your credit cards to settle dues.
Splitting payments makes it harder to handle how much your company pays each month and even exposes you to risks. The best solution is to handle all company expenses from a single place.
2. Keep Track of All Due Payments
To ensure a smooth cash flow, stick to your budgets and facilitate decision making, you need to know about each penny you owe and when it is due. So, make sure each payment is tracked clearly in your expense management solution.
You can choose to set up recurring payments to avoid distractions and gain visibility across payments. But make sure you only give access to a few people as you don’t want everyone to be seeing your confidential data.
3. Know Who Clears Your Payments
Most of the time, you don’t know who clears your payments. It would be great if you find out who is in charge of authorizing payments.
While it depends on the company structure, you can request your point of contact to connect you with the concerned person. This will ensure that your invoices don’t get unpaid.
This was all about how online invoice payment processing software can help you nail the accounts payable process. If you are skeptical about purchasing one, try out a free receipt maker for a month or two, then purchase one. So, what other steps will you take to streamline your accounts payable process? Let us know in the comments below!