Accounts Payable (AP) solution can help businesses to drive costs, increase productivity, and improve cash flow and vendor relations. Understanding the requirements and the entire solution itself is important when finding the best software for your business.
The size of your business, existing information, and particular functional requirements will determine the right AP solution for your business. Understanding your options when choosing the solution for your business will help to make the right call on which accounting system is best for your business’s needs.
Accounts payable reports provide information on how much your organization is buying and from whom. This lets you negotiate with vendors for better payment terms and deals. With this, you can then decide whether to consolidate purchases to a few vendors or choose alternative vendors if better pricing is available.
AP software improves staff efficiency by minimizing the time needed to issue checks and prepare annual reports, reduce payment errors, identify duplicate payments, and eliminate vendor fees. Ultimately, this will improve process efficiency.
Accounts payable solution can help improve cashflow management by helping to decide when you should pay an invoice. Some vendors offer early payment discounts. The SutiAP software will help you determine if it is better to make the payment then or at a better time in the future. The accounts payable software determines the legitimacy of vendor invoices. It lets you negotiate with vendors so that the bills are paid on the right schedule, which helps in efficiently managing the cash flow.
Many AP solutions will support ACH payments, which can help reduce the cost and time spent when printing checks. ACH payments can also reduce the fraud and errors that commonly occur. ACH and other payment modes can help reduce costs while also maintaining relationships with vendors.
Entering records and checks are the most fundamental part of the payable process. Automation will save the unproductive time spent managing the accounts payable processes. When considering the different accounts payable options, understanding how different payable options allows you to populate check fields, schedule prints, and prepare the mailing of these payments will be necessary to make the best informed decision.
The ability to report the accounts payable process can have a major impact in managing cash flow. The data available within these reports is critical because they provide the information about why the charges have occurred and how to avoid similar additional charges. You will have to create reports based on the expense type, date, payment date, period, status, and vendors. Most importantly, the accounts payable module must show you which payments are made, which are not, and which are in process phase.
The accounts payable software will not only track individual payments, but also provide you with an ongoing vendor database. Make sure that the software supports all the vendor information that you need to keep on hand. The solution should be able to easily sort the vendor list and export any data for printing.
The solution should include controls to identify the authenticity of each payment made. Recording each payment with the original purchase order or vendor bill helps to reduce fraud and errors. The accounts payable software should eliminate unauthorized payments by accurately reconciling invoices and POs.
Accounts payable transactions don’t just simply happen; they are a part of a larger business process. The AP software should deliver the payables ledger information to the balance sheet in the general ledger. Integration with purchase orders is also important, as both the accounts payable and purchase order process benefit from mutual access to vendor lists. Integration is important to identify which payments have been made and ensures that the reconciling accounts payable process is easy.
Many accounts payable solutions now support ACH payments, which reduce the cost of printing checks and results in quicker turnaround periods when completing transactions.
The payment terms of the various vendors can vary greatly. Making early payments can be beneficial, as you can get instant discounts and best deals from vendors.
The level of reporting functionality will vary between different solutions. Your accounts payable software should feature the ability to customize fields, report complex scenarios, create graphical reports, and improve the process efficiency.
Accommodating funds that may not have been cashed often creates a unique accounting challenge. Your AP software should feature special tools to manage this specific kind of transaction.
Author Bio: Marissa Levin is a marketing consultant, freelance writer at SutiAP, who regularly writes articles on Business, Finance, ERP, and Cloud/SaaS trends