To push your business' growth, you will inevitably take on accounts payable. Managing these accounts, however, isn’t as simple as paying off a personal credit card. They become an integral part of your business’ operations that require workflows to effectively manage. From your initial purchase order to your final accounting reconciliation, you must closely oversee each step in the accounts payable cycle.
One of the best ways to optimize the efficiency of your accounts payable cycle is to use document management software. Here is why:
You will know when to pay your bills
The most important part of your accounts payable cycle is the part when you actually pay your bills. As your company grows, your budget will change and you will take on more accounts payable. You will need to schedule payments based on your needs for the flexibility of your budget and the actual due dates of your bills. This isn’t easy to do manually.
Instead of storing payment dates as a simple digital file, document management software creates a workflow for your accounts payable. This will map out each step in the cycle, including when it’s best to pay your bills based on your budget needs, due dates, the amount owed and other pertinent information.
Paying your bills will cost you less money
The mere act of paying your bills isn’t cheap. In addition to any monetary costs associated with the process, you also have to invest the hours of your employees. This time investment alone will cost you thousands of dollars per employee.
One of the ways in which document management software will make your accounts payable cycle more efficient is reducing the number of steps involved with the process. This is due to the fact that accounts payable software will automate many of the steps that would take your employees hours to complete.
You will have fewer bill pay errors
A bill pay error can cause a lot of problems. It puts your business at risk of getting penalties and fees if you underpay; it damages your relationships with the debt holder; and the time and cash required to correct the issue caused will cost your company money.
Good document management software can break the cycle of bill payment errors by simply not allowing them. This is because document management software can be programed to automatically make the correct calculations for payments, and prevent any payment changes without explicit approval from authorized personnel.
Your employees will also no longer be able to make incorrect calculations, add the wrong number of zeroes to a payment or put a decimal in the wrong place. If there are any discrepancies, your document management software will catch it and alert you – or fix the problem itself – long before it becomes a serious issue.
Accounts payable auditing will be streamlined
One of the most critical – and difficult – parts of your accounts payable cycle is auditing. You must verify each accounts payable transaction to make sure that it was correct and properly fulfilled. Sifting through mounds of these documents is a time consuming process.
Document management software can seamlessly organize your accounts payable documents for easy auditing. Your software will also be able to automate certain elements of your accounts payable audit. Both of these benefits will save you time and prevent this part of your accounts payable cycle from being overwhelming.
Is your accounts payable cycle efficient enough?
Streamlining the way you manage your accounts payable with document management software will enhance your business relationships, protect you from undue debt and save your company money.