Should You Outsource Your Accounts Payable? Pro’s and Con’s

With an AP automation solution, companies are able to improve efficiency and accuracy, reduce manual labor and errors, and save time and money, while still having control over the accounts payable processes. Besides that, no important and sensitive data is shared with an external provider. Companies can receive invoices in various formats and templates from numerous sources when they outsource invoice processing to a competent third-party provider.

Cost and time savings

By automating your payables, you can save up to 60 percent on processing expenses and gain better control over your invoices and payables. When you’re outsourcing Accounts Payable, you’re hiring an outside team to fully take over and run your AP department. An Accounts Payable outsourcing company will utilize automation software to maximize efficiency and accuracy. Alternatively, automation technology can be implemented in-house and be operated by your Accounts Payable team. If you’re facing any of the above issues, it’s time to look into Accounts Payable outsourcing companies. Outsourcing is one option for business owners who want a third party to handle the entire process rather than taking the resources and time to overhaul the department in-house.

Four benefits of outsourcing accounts payable

GEP delivers an action plan that optimizes your contracts and payment terms, improves your procure-to-pay Law Firm Accounts Receivable Management process, increases compliance and prevents future leakage. By following these tips and conducting thorough due diligence, your company can make a well-informed decision when choosing an AP outsourcing firm. This will help ensure a smooth transition and maximize the benefits of outsourcing for your accounts payable department. Outsourcing accounts payable helps businesses avoid these costs while using the best document management and business intelligence tools available.

AP automation vs. AP outsourcing

Of course, there are some downsides to using third-party accounts payable outsourcing services. Companies can gain better visibility into their payments accounting activities by partnering with an automation software and payment solution provider such as AvidXchange. AvidXchange’s cloud-based platform enables teams to access all accounts payable bills and payments from any connected device, 24 hours a day, seven days a week.

Choosing the Right Accounts Payable Outsourcing Provider

Improved efficiency in accounts payable processes can also lead to better cash flow management and a more strategic use of financial resources. Over the years, we have built a comprehensive list of accounts payable processing services across industry verticals. Our commitment to accuracy and completeness in managing outsourcing services has helped us grow our business by leaps and bounds. We follow the standard accounts payable process, such as maintaining the master vendor file, receiving and uploading invoices into a financial system, verifying, and approving and processing payments. As a specialized accounts payable outsourcing company, we guarantee you services that will ensure your financial statement and cash position is healthy and transparent.

Our experienced professionals will assist you identify inconsistencies in your current process and redesign it for a smoother workflow. In the process, we will deliver additional benefits for long term process sustainability. Access to great data and information allows you to make informed decisions or take action. We digitize your information — giving you instant access from anywhere — resulting in increased profit margins while reducing risk. You can contact us today to get more information about our exceptional AP Processing services.

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• Even the slightest error discovered in an account’s audit can lead to not only costs but also compliance issues.
• They control the entire process, customise workflows, and communicate easily across the business.
• AvidXchange supports over 6,000 customers and has over $140 billion in annual transactions through its network of over 825,000 suppliers.
• When you turn the reins of your AP over to a third-party provider, it can be hard to know exactly what level of oversight and supervision you have.
• An AP outsourcing provider bridges the gap by providing sophisticated security measures and technology for AP processes that reduce the chances of a company experiencing something like payment fraud.

According to Ardent Partners’ Accounts Payable Metrics that Matter in 2020, the top challenges holding AP back are exceptions, lengthy invoice approval times, and too much paper. Another big challenge is the amount of time staff spends on handling supplier inquiries. We’re all guilty of it, having that ‘I’ll just do it myself’ mentality, and sometimes it works to our advantage, and sometimes it doesn’t. When it comes to your company’s accounts payable process, outsourcing it through an accounting service that provides AP automation could What is bookkeeping mean the difference between a thriving and struggling business.

• Choosing a vendor to help you take advantage of the benefits and opportunities offered by AP outsourcing is a major decision.
• They offer a range of technology, personnel, and value-added consulting services to help manage your accounts payable processes more efficiently.
• When outsourcing accounts payable processes, you’ll encounter several challenges that can disrupt your workflow and impact your revenue.
• The rules-driven nature of accounts payable processes make these procedures appropriate for third-party management.
• Utilizing specialized AP services provided by third-party vendors can significantly reduce manual workload and streamline invoice processing.
• You may not even notice serious errors — such as duplication of invoice processing and exception processing — until it’s too late.

It’s not as if the vendor is a mix of roles from CFO and Controller, to AP Manager and AP Processor, which can happen at smaller firms—one person wearing many hats. Depending on where the vendor is located or if they have a distributed staff, you may find one with near-constant uptime when they are utilizing technology like AP Automation. This makes the invoices accessible, easy to track, and most importantly paid on time, which results in an up-to-date overview of the AP workflow. Another important benefit of outsourcing is access to the latest tools and technologies to optimize AP processes.

What Is Accounts Payable Outsourcing?

As the business world becomes more competitive, companies continually look for ways to improve services and increase cash flow. Following the rationale that time is money, businesses use outsourcing to make the most of internal employee time. Outsourcing accounts payable services means sharing sensitive financial data with third parties. This can raise security concerns, especially if the provider doesn’t have robust security protocols accounts payable outsourcing in place. Data breaches can occur and expose your financial records to unauthorized parties. Pfizer outsourced its accounts payable to streamline financial operations, especially with the increased complexity and transactional volume post-pandemic.