Is Accounts Payable Outsourcing Right for Your Business?

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. 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. By partnering with an experienced outsourcing provider, your organization can benefit from their expertise and technology to streamline this function. Accounts payable outsourcing services involve partnering with an external provider to manage your company’s bill-paying responsibilities.

Lack of control over accounts payable

In these cases, there is sometimes a possibility that certain entries will be duplicated. Before outsourcing, it’s wise to educate your employees about the new process so they can work in tandem with your outsourced provider. There’s nothing worse than conducting an accounts payable audit and discovering errors. Depending on the rules that govern your industry, errors could even lead to compliance issues.

Digital & Automation

Improving quality and automation, cutting costs, gaining access to a more stable pool of qualified talent, and freeing up internal teams for higher-value activities are common drivers. But no matter your focus, clearly defining your end goal is essential to measuring your outsourcer’s performance and setting the right expectations for your business. Learn https://www.bookstime.com/ how a 3PL company improved efficiency by partnering with Invensis and minimizing errors in AP and AR invoice processing. Explore our comprehensive range of other accounting and bookkeeping services to expand your business’s financial capabilities. Click on the links below to navigate to specific business services and discover how our expert team can optimize your accounting and bookkeeping processes for maximum efficiency and profitability.

Benchmarking Your Finance Department Size and Cost

The Capabilities score measures supplier product, go-to-market and business execution in the short-term. The Strategy score measures alignment of supplier strategies with customer requirements in a 3-5-year timeframe. Establish clear communication channels and regular reporting protocols with your outsourcing partner to maintain better oversight. Request real-time dashboards or reports that provide transparency into the AP process. This can make it challenging to track progress, resolve issues quickly, or ensure that the provider meets your company’s accounts payable needs. Ask potential providers about their data privacy and security policies and any certifications or audits they may have undergone to demonstrate their commitment to safeguarding your financial information.

Software

The best outsourcers regularly hold monthly service level reviews, ensuring stakeholders get to the bottom of issues and resolve them quickly. Too many outsourcers treat transition as an afterthought, but it sets the foundation for long-term success. Properly transferring knowledge from one team to the next – and bringing documentation up-to-date – is critical to avoiding gaps in service.

• AvidSuite for Financial Services, a purpose-built solution for financial services firms from AvidXchange, offers automation solutions to banks and credit institutions.
• With access to advanced automation and expert support, it’s never been easier to take control of your finances—without having to manage it all in-house.
• According to one study, 78% of best-in-class businesses had adopted e-invoice processing technology compared to just 38% of their struggling competitors.
• As you delve deeper into the realm of accounts payable outsourcing, you’ll discover a treasure trove of efficient vendor management strategies.
• In addition, AvidXchange can handle the growing needs of small and medium-sized organizations and provide scalable solutions to automate the more complex AP workflows of larger enterprises.

Invoice Receipt and Processing

Choosing a vendor to help you take advantage of the benefits and opportunities offered by AP outsourcing is a major decision. It pays to partner with an AP vendor that has an established track record, uses accounts payable outsourcing industry-leading technology, and provides stand-out customer services. The company claims its software can reduce data entry errors by 83% with automatic header and line item capture, reducing the time typically spent by AP staff on entry by at least 50%. Accounts Payable outsourcing and automation sometimes get used interchangeably, but there is a difference between the two.

• You can further follow the status of work in real-time as the invoices are corrected and standardized for faster approvals.
• If your business runs on flexibility and frequently makes real-time adjustments, AP outsourcing may lead to more headaches than peace of mind as the processor struggles to keep up.
• This step makes sure each invoice is reviewed and approved by the right stakeholders in your organization.
• 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.
• For an in-house AP team, you need to manually search for the latest technologies, check reviews, pay for licenses, and keep updating them.
• Most in-house teams have a financial supervisor, such as the CFO, to manage issues when employees aren’t present.
• With any change comes some hiccups and there might be some initial challenges when outsourcing the AP process.

Strategic Digitization Support

This will help you track progress and ensure that your outsourcing provider is delivering the expected results. Some common goals and KPIs for AP outsourcing include cost savings, increased efficiency, improved vendor relationships, and reduced error rates. Communicating these goals and KPIs to the outsourcing provider retained earnings is important to ensure alignment. Pricing is another critical factor to consider when selecting an AP outsourcing provider. Look for providers offering transparent pricing models and detailed cost breakdowns to help you understand the total cost of ownership. Additionally, consider the provider’s pricing in relation to the value they can provide to your organization, such as cost savings, increased efficiency, and improved vendor relationships.