LYON, France and MIDDLETON, Wis. — June 30, 2020 — Esker, a worldwide leader in AI-driven process automation solutions and pioneer in cloud computing, today announced a strategic partnership with oAppsNet Partners, a systems integrator specializing in business solutions based on Oracle applications. The partnership is focused on providing Oracle customers with even more value and resources as they address procure-to-pay (P2P) automation through Esker.
With over 20 years of hands-on experience in the Oracle space, oAppsNet brings an unparalleled combination of application know-how and business experience to reinforce Esker’s integration with the Oracle solutions. oAppsNet chose to partner with Esker because of the true end-to-end experience its solutions bring to the user, providing seamless integration all the way through the ERP system.
“After our discovery of Esker, we learned that they offered solutions no other vendor on the market had and it was clear they were the best of breed in procurement and accounts payable automation,” said Rick Pollina, managing partner, oAppsNet. “It’s been a journey for us to actually find Esker, and we’re anxious to share with our customers because we know they’re going to love it. We can’t speak highly enough about it.”
Esker’s P2P automation solutions seamlessly integrate with Oracle’s ERP solutions, enabling companies to easily switch to paperless invoice and order processing. With paper and manual handling removed from the equation, companies can dramatically improve their workflow efficiency and staff productivity while providing full visibility and accountability from beginning to end.
Aside from their deep technology expertise with Oracle solutions, oAppsNet is customer-focused and follows a similar agile methodology for solution implementation, which were driving factors in Esker’s decision to partner with the company.
“Our automation solutions integrate with a wide range of ERP solutions, but this partnership is focused on reinforcing Esker’s investment in the Oracle business environment,” said Steve Smith, U.S. chief operating officer, Esker. “We’re thrilled to further improve the user experience for our current Oracle customers, and we’re looking forward to an enhanced implementation process for future customers.”
ABOUT OAPPSNET PARTNERS
oAppsNet Partners is a US-based company that specializes in the digital transformation of every facet of your organization. As an Oracle-certified partner with over 25 years of experience, we can ensure that your business’ transition to the cloud costs less, requires less time, and provides you with the efficiencies that will drive your company to the next level. Our proven and comprehensive approach to projects involves a deep dive into existing business practices to provide you with not only the most optimal cloud solution but also the one that leverages your organization’s existing strengths. We pride ourselves on ensuring that every project is successful through in-depth digital training tailored specifically for your company. oAppsNet is based out of Colorado but has employees across the U.S. For more information, please visit oappsnet.com.
ABOUT ESKER
Esker is a worldwide leader in AI-driven process automation software, helping financial and customer service departments digitally transform their procure-to-pay (P2P) and order-to-cash (O2C) cycles. Used by more than 6,000 companies worldwide, Esker’s solutions incorporate technologies like artificial intelligence (AI) to drive increased productivity, enhanced visibility, reduced fraud risk, and improved collaboration with customers, suppliers and internally. Esker operates in North America, Latin America, Europe and Asia Pacific with global headquarters in Lyon, France, and U.S. headquarters in Madison, Wisconsin. For more information on Esker and its solutions, visit www.esker.com. Follow Esker on Twitter @EskerInc and join the conversation on the Esker blog at blog.esker.com.
Running a business is an extremely challenging task. You need to manage a lot of different stakeholders, and you have to keep track of all the different vendors who work with you.
Without the right tools and technology, it can be nearly impossible to manage everything effectively. But with vendor management software in place, you can easily track all your vendor payments, automate workflows and processes, analyze payments by different factors (like timeliness or cost), monitor contracts at risk of being breached in real-time—and more.
As a business owner, you want to ensure that your vendors deliver the best possible services for your organization. You also need to ensure that you’re paying them on time and in full.
Vendor management software can help you manage your vendors more effectively and efficiently. It will allow you to get a complete picture of all the different vendors working with your business—and ensure that everything is running smoothly at all times.
In this article, we’ll go over some of the most important benefits of vendor management and explain how it can help you manage your organization more effectively.
1. Vendor management can reduce risk
If you are a small business owner, you know that there is no room for error when it comes to your operations. One mistake can cost your company thousands of dollars in lost productivity and customer satisfaction, not to mention the potential damage to employee morale and retention. This is where vendor management comes into play. By closely monitoring vendors before they become partners with your business, you can ensure that their services will help reduce these risks and make sure that your company stays on top of its game.
The first and most obvious risk reduction is the quality of your product. Without proper vendor management, you may be working with a supplier whose products are subpar or even dangerous to use. This can lead to customer complaints and potential lawsuits if these customers experience any kind of injury due to faulty equipment.
Vendor management is also important because it lets you keep your company’s reputation intact. If you are working with a supplier who has been accused of unethical or illegal practices in the past, this can reflect poorly on your business, especially if those accusations are true. Whether it’s a risk of poor quality, poor service, poor delivery, poor compliance, a potentially bad reputation, or simply customer dissatisfaction, there are plenty of ways that vendor management can be beneficial for your company.
2. Vendor management reduces costs
There are many ways that vendor management can reduce costs. Here are just a few:
Procurement costs will be reduced by being able to find the right suppliers; suppliers who have competitive prices and quality products.
Supply chain costs will be reduced when you use one contract to purchase all of your supplies from one supplier. This reduces the time spent on procurement and increases efficiency in completing orders from multiple locations or countries with different languages, currencies, or other cultural differences that could slow down delivery times.
Operations costs will also be reduced because there is less manual work involved when managing vendors instead of purchasing directly from them. Thus, it becomes easier for employees to do this type of work when they know what they’re doing.
Compliance costs go way down by using a vendor management solution that specializes in vendor reporting to keep track of all changes within your organization.
The cost of doing business can also be reduced when vendors are managed. For example, if you need to purchase supplies from multiple locations or countries with different languages or currencies, it’s important not just to keep track of those things but also what type of products each company sells and their payment terms.
A supplier management system will allow you to do all this and more by providing improved visibility into how much each vendor owes in real time.
3. It offers better visibility on projects
If you want to get a clear picture of the current status of your project, vendor management software is a must-have.
The software helps in the planning, monitoring, and reporting of projects. It provides you with a comprehensive view of all aspects of your project, including how much time has been spent on each task, what progress has been made, and what issues or risks remain. This enables you to make better decisions about managing changes in processes as well as opportunities for improvement based on actual data.
Vendor management allows you to identify issues and risks before they become problems. It also allows you to see the impact of changes in the project on a real-time basis so that you can make adjustments accordingly. If any critical tasks need urgent attention, these will also be highlighted.
4. It aligns business strategies and goals
Vendor management can align your business strategies and goals with vendors. The vendor management process should be in sync with the overall business strategy of an organization. It helps create a clear understanding of what vendors are doing regularly, which will help you understand how their performance impacts your organization’s success.
Vendor management also enables companies to take advantage of new opportunities for growth and profitability by providing them with valuable insights about vendors’ processes and products that may be used to improve operations. A good way to do this is by setting goals at the beginning of each new year. Write down specific deadlines for when vendors need to complete projects. Track progress on those goals, and check in with them regularly throughout the year to make sure they’re meeting their commitments. This will help keep your staff motivated while keeping costs low.
Moreover, it is important to communicate these goals to vendors when hired. Let them know what you expect from them and how they can help you achieve your business goals. Communicate what success means to your organization in terms of performance, engagement, and other metrics related to vendor management.
5. It enables better control over operations
Vendor management is a proactive approach to managing business operations. It helps you to focus on the right vendors and the right services, manage your operating cost-effectively, manage your operating risk effectively, and manage your operating compliance effectively.
As a result of this control over operations, you can more easily predict how much money each product or service will bring into your business. This allows you to plan better for future expenses. In addition, if you have to work on your own or with a team of employees, having control over your business operations will make it easier for everyone involved. You won’t feel hesitant about asking questions or getting help when needed.
It also gives you control over the quality of your products and services. Finding good vendors and establishing strong relationships with them helps to ensure that they are all providing products and services at their best level.
6. It improves vendor relationships
Vendor management improves vendor relationships by making them more transparent. It provides visibility into the purchasing process, allowing suppliers to see where their products are in the pipeline and when they will be delivered. This allows vendors to plan for their own production and delivery schedules so that when a new order is placed, or there’s an inventory issue, each supplier knows what’s coming up next—they can prepare accordingly.
It also improves vendor relationships by making them more efficient. Streamlining communication between buyers and suppliers over email or phone cuts down on delays due to miscommunication or misunderstandings that could otherwise cause bottlenecks within your supply chain when multiple parties are involved. Plus, it helps speed up payments (if you use your VMS as an automated payment system) which means faster cash flow.
Another way vendor management improves vendor relationships is by making them more effective. Using this kind of software to manage all your vendors makes it easier for them to do their jobs. With less paperwork and fewer emails going back and forth to get things done, they can focus on what’s important: providing excellent customer service or creating better products that meet consumer needs.
7. It leverages resources, tools, and technology effectively
Vendor management software can be helpful in this regard. It’s a tool that integrates with your CRM system, allowing you to manage your vendors, suppliers, and contractors in one single location. This is great for companies with multiple vendors or suppliers because there’s no need to use different tools for each group.
The best part about vendor management software is that it’s so convenient. You can use a single application to manage your vendors, suppliers, and contractors, ensuring everything gets done on time.
However, it’s worth noting that not all vendor management software is created equal. Some applications offer more features than others, while others might have a smaller price tag to match their lack of functionality. Make sure you choose the right tool for your business by researching different products and reading reviews from other users.
8. It leads to better communication between stakeholders and vendors
This is another one of the more obvious benefits of vendor management: it leads to better communication between stakeholders and vendors. When there’s a clear understanding between the two parties, it becomes easier for them to work together. This can mean resolving conflict resolutions faster, but also just generally being able to work through issues as they arise.
For example, stakeholders might not understand how the vendor’s work affects their business. Having that open line of communication makes it easier for them to get answers to those questions. Similarly, a vendor might have something they want to discuss with the stakeholder. It could be a question about how their work is going or an issue during the project.
Another benefit is that it helps vendors understand their clients’ priorities better. While this may seem like a minor issue, it’s actually quite important in the long run. Clear communication between stakeholders and vendors can make all the difference when running your business successfully. When there’s a clear understanding between the two parties, it becomes easier for them to work together.
In the end, it’s all about improving your business. When you have better communication with your vendors and stakeholders, it makes life easier for everyone involved. This means you can get more done in less time, which is always good.
9. It mitigates conflicts within the organization
Effective vendor management can mitigate conflicts within the organization. Conflicts are often a result of miscommunication and a failure to properly manage expectations. To avoid these problems, it’s important to be clear about what you need from your vendors and how they should provide it. This can be done through effective communication practices such as face-to-face meetings or workshops.
Effective vendor management processes are also an important aspect of effective vendor management. When vendors know exactly what is expected of them and when they’re expected to deliver their products/services, there won’t be any surprises for either side.
10. It ensures compliance with regulatory standards and industry practices
Vendor management is the practice of aligning your business with best practices. It ensures compliance with regulatory standards and industry practices.
This means that a vendor management program will help ensure your company follows the rules, laws, and regulations so that you don’t have any problems in the future when it comes time to renew licensing or certification requirements. These compliances include the likes of:
Compliance with laws and regulations
Compliance with industry standards
Compliance with industry best practices
Compliance with industry practices
The importance of complying with legal requirements, industry standards, and best practices cannot be overstated. If you’re not compliant, your business can have serious consequences, including fines or even jail time. Compliance with industry standards and practices is a win-win for both the business owner and their vendors. This keeps them on track with regulations while helping to reduce risk.
Conclusion
Having the right vendor partners is essential to the success of your business.
Vendors can be some of the most important people in your supply chain, so it’s important that you treat them well and give them every reason to want to work with you.
The key to successful vendor management is being proactive.
A good program will help you stay on top of your vendors, which means that you can avoid costly problems and build stronger relationships with them.
Accounts payable processes are daunting and complex at their best; manually processing your invoices can take weeks, and sometimes even months. Manual processing also opens the doors for blatant human errors, unauthorized payments, fraud, and theft. Fortunately, there are several AP automation software options available in the market today.
You need to keep watch on certain items while choosing an AP automation software to make sure it is a good fit for your business, providing the return of investment you want to achieve. In this article, you will find a list of handpicked recommendations that can help your automation process.
We also take an in-depth exploration of a few prominent AP automation software and give useful information about the features they provide to help you choose the application that aligns with your business goals.
The Groundwork to Choose the Best AP Automation Software
Understand and Outline Your Current Processing Progress
Before deciding to invest in automation, you should determine the average time taken to get your invoices coded, approved, and processed for payments. Map out your workflow gaps, and find out where your Accounts are Payable clerks spend the most of their time. Whether it’s inputting and entering invoices into your Enterprise Resource Planning software, or matching the purchase order, receipt, and invoice.
Search for Areas of Workflow Improvement
When trying to improve your Accounts Payable workflow, look for processes that can be improved with the help of automation. For instance, if manually typing and entering invoices is consuming your clerk’s time, you could look into software that provides AI-powered invoice capture tools. Automation can also help you modernize two and three-way matches among invoices, purchase orders, and delivery receipts. Your findings of shortcomings can help you prepare solutions before they turn into a real problem. This will also allow you to estimate whether your Accounts Payable is prepared for automation.
Be Specific With Your Goals
Once you get the idea of what to work on, it is essential to set future goals. This will help you monitor your progress. The average Return on Investment for your AP automation should be in the range of 12-18 months. This timeline is subject to your invoice counts and available AP clerks. Once the system is automated, you can focus on relocating your existing resources to high-priority tasks like timely closing, prevention of late payments, and customer and vendor support.
Research Software You Wish to Procure
While it is natural to be unsure of the choices, meticulously planning and researching the software that you want will help you choose the one that is the perfect fit for your business. Look for testimonials from other firms that have implemented the system you are considering.
Three things to keep in mind while researching the software reviews are:
Verify the reviews are made by verified users
Ensure open lines of communication from the software provider
Does the provider regularly release updates and keep up with the development of new technology
Software Must Haves
The program you select has to have a user-friendly interface that is quite comprehensive and simple to explore. It should also enable electronic workflows to reduce the number of repetitive AP operations such as entering data, converting paper invoices to digital files, and connecting Enterprise Resource Planning (ERP) and other advanced financial software for better comfort.
Data Security
Your automation software processes and stores sensitive financial data. Your software needs to be built with data breach prevention features. Cloud-based systems can be a solution as they are isolated from internal servers. As a result, any illegal access to internal systems is denied. External users and other parties can exchange data via the application and are never able to access your system. Make sure your software has encryption features and two-factor authentication. In a scenario of an accidental breach, your software must have backup processes to prevent loss of financial data.
Multiple Payment Options
Having secure integrated payment portals in your automation software can be useful in fulfilling authorized payments. Payments portals should include multiple payment options, namely:
Credit cards
Debit Cards
Net Banking
Applications that also procure bank statements and categorize the captured statement data using custom rules eliminates possible human errors.
Automation Features to Look for
The application should simplify repetitive tasks like data entry.
Includes document capture and dynamic imaging features for converting invoices into electronic data
Capable of processing large volumes of data, such as invoices and credit memos
Provides centralized data management, for searching and receiving documents
Provides a two-way or three-way match verifying mechanism between invoices and the same purchase order to keep an eye on money owed.
Complies with AP processing standards and regulations.
Software Integration
The software you procure must also integrate with your Enterprise Resource Planning system. It should also facilitate working through different platforms. Often, you will need third-party applications for Inventory Management, Analytics and Reporting, Project management, and Customer Relationship Management. Such third-party modifications should be updated on your automation software.
Accounting Methods
The software should be able to toggle between cash-based accounting and accrual accounting. A small business’s transactions are mostly cash inflow and outflow. The cash-based accounting approach works well in this scenario. On the other hand, the accrual technique should be considered by larger enterprises that conduct transactions on credit. These large enterprises record both accounts payable and accounts receivable. Many businesses begin with the cash-based method of accounting and eventually move to the accrual system. When it is necessary to process accounts payable data, automation should aid in keeping track of payables such as vendor invoices and operations costs.
Billings for Projects
In case your business recruits clients for some projects, your accounting system should be capable of handling project-based billing. Some modifications in your software can enable you to bill your client’s time taken working on individual projects. After that, timesheets may be transformed into invoices. The software allows timesheet approval before producing the invoice to avoid billing bottlenecks.
Tax Liability
Businesses are often under the scrutiny of surprise audits; you might often find yourself in need of software that calculates your business’s tax liability. Make sure your software can execute tax functions such as calculating multiple tax rates and tax liabilities, tax reports, and tax compliance.
Compare the Prices
Most AP automation solutions have a monthly membership fee, which can be paid monthly or you could also take an annual plan. When comparing pricing, though, check for less glaring charges. The most basic package may have limited functionality or allow you to handle a fixed amount of invoices each month. There are extra fees in the form of platform payment choices. Find an automation tool that charges a fixed fee rather than a per-user fee. Flat fees give the greatest overall cost reduction.
Conclusion
Keeping track of a company’s outstanding debts is critical to developing its reputation. A business’s AP must be managed successfully and efficiently. Since handling accounts payable may be stressful and time-consuming, using an account payable automation system is undeniably a better choice. If you follow these suggestions, you will be selecting the finest AP automation software available.
Making your business’ vendor management a well-structured process has various advantages. After all, to manage a certain business, you need various plans to see through to every little action. If you are a vendor manager, you know how tough it can be to bring vendors to your business, to convince them that supplying materials to your business would be good for them too. In such a case, having a pre-decided workflow is the best course of action.
Here are the benefits of a well-structured vendor management process; read on ahead to know more.
Better selection of vendors
If you keep the workflow organized, you’ll have a better idea of whom to select. The timely sorting of the vendors based on various factors lets you get a better glimpse of what you need from your vendor. This also gives you a greater selection of vendors; the more, the merrier. Keeping this in mind, planning out your process to get the best vendors in your selection is advisable.
When you have a greater selection of vendors, there is an even greater advantage that comes with it. There will be bidding wars between vendors that let you choose. You can leave the negative bidding to the vendors to get the lowest price of supplies. This is why everyone tells you to keep your business (and your belongings) organized. There are a lot of good things that come with an organized workflow.
Managing contracts is easier
Contracts are an essential part of vendor management; they dictate when, where, and how the vendor will provide the supplies. This doesn’t take much to go awry, especially if you are running a big business with a multiple vendor system. You will need to manage a few vendors at once and look at their compliance with the business’ rules and regulations, their performance, and the quality of the materials they provide. This, by no means, is an easy task; accomplishing this needs a lot of management and organizing from your end.
So, managing contracts efficiently lets you make sure that you don’t miss any vendor’s deadline; you can make sure that the supplies given to you are the quality that has been mentioned in the contract. If you do so, you can successfully manage your business; organizing contracts is a very good practice that should be done by vendor managers.
Performance improves
Once you have managed to get all the contracts ready and have selected the vendors to provide you with the supplies, the next step is to look into their performance. Performance mainly includes checking whether the vendors fail to comply with their deadlines, what quality of materials they are providing, how soon they are providing the supplies, and how quickly they respond to your requests. In case you find that a particular vendor is performing splendidly, you can assign more responsibilities to them, and if someone is performing poorly, you can try to improve it or replace them.
Organizing your vendor receipts and performance records greatly helps manage your vendor performance. You can take the necessary actions as soon as possible so that you don’t miss out on any error in the system, and you can rectify it.
Better relationship with vendors
Communication is the key to success. The best way to improve your relationship with your vendor is to ensure they know what you need and what you want at the right time. Without effective communication in place, you might lose clients or even vendors at times. So, how does organizing help with communication with your vendors? It’s quite a simple answer; once you have organized your vendor management workflow, it becomes easier for you to know what you want. Once that is done, communicating with your vendor is just a call away.
There are many advantages of maintaining a good relationship with your vendor, the first one being discounted prices. Discounts are often considered for those with good vendor-business relationships. Apart from that, the vendor can include you in their circle, which increases your contacts by a hundred-fold. So, try to be in the good books of your vendor by communicating properly.
Better value
The ultimate goal of your business is making money. Once you properly manage and implement your vendor management system, all you need to do is process the supplies (or resell them) to gain profits by the margin. This will mean that you are getting the value for the money you spent, the value that is rightfully yours. You need to be careful about this, though; one wrong step and your business could plunge into a loss. So be organized and be careful, manage your vendors and your business equally well. Both are co-dependent and very important to you as a businessman.
If you are a business owner, your role likely includes managing the company’s finances. Whether you have a team of accountants and bookkeepers or if you do the work yourself, there are several aspects of this process that can be quite tricky.
One important area is accounts payable.
In this guide, we will explore what it means to have an effective AP (or Accounts Payable) system in place—including how to keep up with your invoices and make sure they get paid in full on time every single month.
Start by creating an accounts payable policy
The first step in the accounts payable process is to create an accounts payable policy covering all aspects of your organization’s payment practices. An effective policy will help you:
Ensure that payments are made on time and accurately.
Prevent overpayments or late fees from occurring due to confusion about who has authority over invoices, who should sign them off, and when they should be paid.
Reduce the risk of fraud or theft by clearly defining which employees have access to account information and how often those employees should review relevant documents for accuracy before being paid out by an outside source (such as a credit card company).
Your accounts payable policy should be reviewed and updated regularly to keep it relevant. The first thing you need before creating your accounts payable policy is a clear idea of what types of invoices are being paid by whom, when they need to be processed, and how often they will come due. This will help ensure that all employees know exactly what their responsibilities are regarding this aspect of business operations.
Next, implement software to streamline your AP process
If you’re a business owner, you may have noticed that your AP process is way more complicated than it needs to be. That’s because, while traditional software tools can help streamline the process, they also come with their own set of limitations—including poor functionality and exorbitant subscription fees.
But if you start looking around for better solutions, here are some key benefits that might catch your eye:
Software can help you save time and money by automating countless manual processes that otherwise would take up hours in staff time every day.
It can also help you get paid faster by enabling your vendors to submit invoices electronically via email or web portal instead of sending paper checks through snail mail (which takes even more time).
It helps avoid legal issues by ensuring all transactions are recorded accurately and securely so there are no mistakes made in recording payments made between parties involved (which could lead them into legal trouble down the road).
One last benefit of implementing AP software is that it can help you avoid tax issues. If your business is not properly recording transactions, then it may end up owing money to the IRS (or other government entities) when tax time comes around. AP software makes this process much easier because no matter how many invoices get paid off in one month or how many checks come in during another. As a result, all expenses are automatically recorded and updated accordingly, so there are no surprises later on.
Create a supplier database
A crucial step to managing your transactions efficiently is to create a supplier database that contains all relevant information about your vendors. This will help you manage your vendors more effectively, avoid duplicate payments and keep track of the items you purchase from each vendor.
Here’s how:
Create a spreadsheet in Excel or Google Drive with each vendor’s name listed down one side with columns including items purchased (such as paper), date purchased (if applicable), the amount paid, and any other notes related to the transaction (such as tracking number). If there are multiple people responsible for purchasing certain items from different suppliers, then list those employees’ names along with their email addresses. This way, they can receive notifications when something needs attention.
As soon as you receive an invoice from one of your suppliers, enter this information into the spreadsheet. This will ensure that all purchases made by anyone within the organization are documented in one place.
Organize and digitize invoices
Another step in the accounts payable process is to organize and digitize your invoices. It’s worth mentioning that this is a repetitive process, so it might be something you want to automate with AP software. That way, you don’t have to do the same tedious steps over and over again. Here are some tips for organizing:
Organize by vendor name or invoice number
Create a spreadsheet or database where you can store all of your invoices in one place
If possible, send emails directly from the invoice itself once it arrives at its destination (this isn’t always possible; it depends on what kind of accounting software you’re using). This will make it easier for authorized personnel who need access because they’ll receive notifications immediately rather than having them wait until they get home at night before checking their inboxes! Another option would be setting up alerts within your account management system, so anyone who needs approval knows right away when an email comes through or gets an alert text message.
Develop a system of controls
Once you have a basic understanding of how accounts payable works, it’s time to figure out how to make sure that the process is performing as intended.
The first step in this process is developing a system of controls. These are designed to ensure that your employees are using the correct procedures and safeguards when processing invoices, payments, and other documents related to accounts payable. These controls can include:
Standardized practices: For example, each employee may be required to follow a certain workflow so that all invoices have been approved before payment can be issued (this could involve different teams or departments). Once the standard workflow has been established, it should be written down so that everyone knows what they need to do their job correctly.
Internal audits: You can also hire someone within your organization to oversee transactions between vendors and your company—for example, someone from finance might fill this role by auditing invoices as they come through from vendors every month. This will ensure there’s no fraud happening within these transactions (e.g., where one invoice does not match another).
Risk assessment tools: There’s software available in the market which helps assess risks associated with different types of business models. If yours involves handling cash flow from vendors, then it might be worth investing in some such software. This way, you’ll know how much money you need at any given time–and whether there are ways for fraudsters trying to steal some of those funds.
The 3-2-1 rule
The 3-2-1 rule is a fundamental principle of accounts payable and one that you should always keep in mind.
Three days: An invoice should be paid within three days of receiving it unless there is a valid reason for extending the payment date. In such cases, speak with the vendor before doing so; they’ll appreciate being kept in the loop.
Two days: An invoice received by mail or fax must be paid within two days of receipt—unless there is a valid reason for extending this time period as well. The same goes for faxed invoices; send them out as soon as possible and make sure they arrive at their destination on time (or even early).
One day: After reviewing an invoice and ensuring that it’s accurate, sign off on it immediately and pay according to company policy or procedure (e.g., via check or wire transfer).
If you can’t keep up with these requirements, consult your accountant or financial advisor on how to best manage your accounts payable process so that it’s as efficient as possible. They’ll likely recommend using software instead of manually processing every document. Manually processing documents is inefficient—it takes up time and energy that could be spent doing other important things.
Double-check everything before you pay the vendor
Now that you’ve got the invoice and all the other documents necessary to make a payment, it’s time to double-check everything. Here are some things to check:
The invoice. Check for any errors on the part of your vendors or your company, like transposed numbers or incorrect spelling.
The vendor. Make sure this is indeed the right vendor and that they haven’t sent you any duplicates or additional invoices in error (which can happen). If there’s a mistake with their information, ask them to resend an updated version of their invoice before making payment.
Amounts due. Make sure each line item listed corresponds to its corresponding document—for example, make sure there are no credits offsetting payments where they shouldn’t be (such as when products come in underweight). If there are problems here, ask your vendor to correct them so that you know exactly what amount is owed by either party at all times as per the original contract/agreement between the parties involved (e.,g., purchase order).
Follow up on outstanding balances
Once your payments have been made, you want to make sure that the business owners don’t forget about their outstanding invoices. If a payment is made, send a reminder email or letter to remind them of the outstanding balance. Also, try following up with a phone call as well. You can even go as far as sending them an automated reminder email or text message for every remaining day that their invoice is due.
If you are unable to collect from the customer (because they are no longer in business), then it’s time for you to take action and start writing off those bad debts on your books.
If you have a small business, then chances are that you’re not going to have time to manually follow up on outstanding invoices. It becomes much easier when you have an automated system in place.
Of course, the best way to ensure that payments are made on time is to invoice quickly. If you have a large business, then this can be a challenge because there might be so many invoices coming in at different times. You can take advantage of AP software to help streamline the process and make sure that every invoice gets paid.
You can ensure you’re paying your vendors on time by streamlining your accounts payable process
As a business owner, you want to make sure you’re paying your vendors on time. This is important because it keeps your relationship strong with them, and good vendor relationships are essential in maintaining a healthy balance sheet.
In order to ensure that this happens, you need to streamline the accounts payable process—and there are several ways you can do so:
Create an excellent accounts payable policy for your company (or take one from another company that has a proven track record) and review it with staff at every meeting. If someone doesn’t understand something in the policy or feels uncomfortable following it, they should bring it up immediately. This way, everyone will be aware of any issues before they become serious problems down the line.
Ensure that all employees are familiar with good software practices—in particular, those related to data entry and data validation—and provide training where necessary. Thus, everyone will know how things should be done properly before entering information into any system used within accounting systems.
Conclusion
Your business and your vendors depend on you to pay their bills. You would not want to lose the customers and suppliers who trust you with their business, so it’s important that your accounts payable process is efficient and effective. There are many pieces to the puzzle when it comes to keeping up with the payments owed by clients or vendors, but we hope this article has given you some helpful insight into what those are.
The key takeaway here? Don’t be afraid of keeping track of your bills—it just takes a bit of organization (and maybe an app)! Remember that if something goes wrong, there are ways for you personally as well as for your company as a whole to avoid getting stuck with late fees or penalties from creditors who need payment before they can move forward with other projects. And don’t forget: If all else fails and you find yourself in financial trouble due to unpaid invoices, there are various options available depending on how much money needs repaying as soon as possible.
