By entrusting these mind-numbing tasks to the experts, you can bid farewell to the days of manual invoice handling. Embrace the joy of automation and witness the seamless flow of invoices, as if choreographed by the most talented of dancers. More and more businesses rely on AP outsourcing firms to redesign and streamline their AP processes despite mild hiccups along the way. Book this 30-min live demo to make this the last time that you'll ever have to manually key in data from invoices or receipts into ERP software. The most common AP processes that are outsourced are purchase order or invoice matching (0r 3 way matching), invoice automation, discrepancy resolution, and AP administration.
Accounts payable (AP) outsourcing is entrusting your organization’s accounts payable processes to a third-party company specializing in managing accounts payable. This can range from invoice receipt and processing to vendor management and payment processing. When executives consider outsourcing accounts payable, they usually come across keywords such as in-house teams, AP automation, SaaS services, or shared services centers. The differences between these options are essential to note in this article to help businesses pick the right partner for them and their growth goals. In the following, we will discuss the pros and cons of outsourcing accounts payable services compared to having an in-house accounts payable team, AP automation, and the shared services center. The accounts payable department is responsible for managing any invoices or due payments for vendors and suppliers the business works with to provide material, products, services, or other goods.
Is Accounts Payable Outsourcing the Best Choice for Your Business?
With a third-party provider, you will have to play by their terms and timings. They might be located far away and the lack of transparency in processes can become a serious issue. Before implementing a move to outsourcing or automation, get your data in order to ensure you begin your new program with a clean slate. Take time to check and cleanse data for errors, duplicates, or issues that could hinder transparency in your AP processes. These include delegation of responsibilities, implementation of new software, and changes in the submission systems.
- Imagine a world where invoices are processed and payments are made in the blink of an eye.
- When you outsource, you don’t have as much visibility over the process, nor do you have as much control over how the process works.
- Accounts payable outsourcing allows you to witness this extraordinary phenomenon.
Outsourcing Accounts Payable: The Pros and Cons
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. AP outsourcing companies don’t just follow best practices when doing their work. They incorporate technologies that identify errors before they become liabilities. However, those businesses which can incorporate automation, e-invoicing, and other efficiency tools will gain an edge over their competitors. They’ll even negate many of the problems that have plagued AP departments for decades.
AP outsourcing solutions put efficient systems in place that allow you to pay vendor invoices on time (or even early) to enhance supplier relationships. A satisfied supplier may offer discounts due to early payments, thus increasing your profitability. If you’re outsourcing accounts payable data, you need to share your confidential financial data with the third-party provider. As most outsourcing providers charge per invoice, duplication errors can be quite costly. And as these providers could be thousands of miles away, keeping track of these duplicates can be difficult.
With the right partner in place, your organization can unlock the potential of accounts payable outsourcing and drive the success of your financial operations. Genpact provides a comprehensive range of AP outsourcing services, including invoice receipt and processing, vendor management, and payment processing. They strive to offer cost savings, improved efficiency, and increased visibility and control for their clients. Vendor management services are essential for cultivating positive partnerships and optimizing supplier communication. Data privacy and security are critical concerns when income tax calculator 2021 outsourcing accounts payable processes. Improved efficiency in accounts payable processes can also lead to better cash flow management and a more strategic use of financial resources.
Accenture: Transforming Accounts Payable Operations
During this stage, the outsourcing provider carefully evaluates the client's current AP processes, pain points, and requirements. This information is then used to develop a customized solution that aligns with the client's specific needs and business objectives. Mid-sized businesses don’t often have the luxury of employing a robust team of security experts, nor do they have the resources to run extensive audits and eliminate risks. To get the security tools and skills they need, many small to medium-sized businesses rely on the outsourcing services of larger and more sophisticated AP experts. Furthermore, onboarding new technology, although necessary, comes with a hefty price tag. 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.
The provider’s ability to operate from different locations is a huge added value to cater for the needs of your operations and the varying demand in different sites and time zones. Outsourcing your accounts payable tasks not only saves you money but also frees up valuable resources within your organization. Instead of hiring and training an in-house AP team, you can rely on the expertise of a dedicated service provider.
