Human error, missing paperwork, invoice approvals, unauthorised expenses: accounts payable (AP) can be one of the most tedious and time-consuming processes that businesses and their accounts departments undertake. But it doesn’t have to be this way. Implementing an accounts payable policy is the first step to eliminating pain.
Create an accounts payable policy for your business
Navigating accounts payable without a policy is like trying to go off-road without a four-wheel-drive – you’re going to hit a lot of hazards along the way. Adopting an effective system will ensure everyone in your team has a clear idea of how payments work. This will reduce the time it takes to approve and process invoices and expenses. Make your policy easy to understand and clearly explain the steps employees and suppliers need to undertake to get paid. Managing vendor invoices and other payment request documentation is not just about the paperwork. For example, expenses need back up documentation such as receipts. Usually, they need to be coded to an account, plus they need approval before they can be paid. By outlining the who what and how of your policy you will save time later.
Why you need a policy
We’ve all heard the stories of expenses taking months to process or invoice payments being delayed as the issuer had failed to include the correct information. Having an AP policy will help eliminate these issues. It ensures staff and vendors get a better idea of the processes and any roadblocks to payment. An accounts payable policy benefits everyone. Your accounts team get the info they need, and your business is better protected in the case of an audit as you will have crossed all your Ts.
Keep it consistent and fair
Once you’ve written up your policy, shop it around to your staff to check over. There may be pain points you haven’t addressed. By allowing your team to collaborate on the document, they feel more ownership of the process and are more likely to follow it to the letter. When you’ve nutted out the final policy make sure you apply it to all members of your staff. There should not be one rule for management and another for your employees. Consistency counts!
Embrace cloud solutions to streamline your processes
If you genuinely want to streamline your accounts payable system, automating processes is the next piece of the puzzle. An accounts payable software solution can give you a real-time picture of your finances. You can quickly check invoicing data, approve payments and the software’s machine learning should be able to suggest new best practices to speed up the time taken on mundane tasks. Best of all, when it’s coupled with a mobile app, staff can easily log expenses via their mobile phone and tag it with appropriate codes. By adopting an automated expense management system, employees can upload and submit expense claims in real-time straight from their mobile phone. This completely eliminates time-consuming, manual data entry.
Similarly, business owners can run through invoice approvals and payment fulfilments whilst on the fly. This means you no longer have to be tied to a desk in order to get things done.
For more great tips on how to take the pain out of Accounts Payable download our accounts payable management invoice policy.
Now read this