5 Useful Tips for Effective Accounts Payable Management

In a company’s general ledger, accounts payable is a type of account that records the amount of money a business owes to its creditors. In its essence, accounts payable management is the process of streamlining and automating all payments through a payroll management system. By doing so, all payments are automated, and the chances of faulty or delayed payments are greatly minimised. It also helps a business with improving supplier relationships, reducing late payments, optimising working capital, improving contracts, and more! This article will help you explore how you can use accounts payable in a more efficient manner.

 

Here are 5 useful tips for effective accounts payable management:

 

•       Go paperless

 

Digitisation of all records and files is highly recommended. By doing so, you are not only saving time, but also money, effort, and space. For someone to corrupt or steal your files is very easy when everything is on paper. In essence, the importance of accounts payable management is being able to make timely payments to third parties or vendors. Once your payroll management system starts automating your accounts payable, you can enjoy not having to worry about different payments at the end or beginning of the month or year.

 

•       Organise your invoices

 

Obviously, not all invoices will have the same amount. Some will have different amounts, some will be calculated with different guidelines, and some may need to be paid urgently for different reasons. Accounts payable management is all about simplifying processes, and this is where payroll system software will act as a catalyst. Organise your invoices according to their due dates, final amounts, and specific payment terms to avoid any mistakes. If there are any special clauses for different contacts, you can customise the payroll system software according to your needs and requirements

 

•       KPIs

 

KPIs, also known as key performance indicators, can help track the efficiency of almost anything that is quantifiable. That being said, KPIs can also help gauge how efficient your accounts payable department is. KPIs can help you track:

 

 

•       Number of late payments

•       Number of on-time payments

•       Any cost incurred for late payments

•       Accounts payable turnover ratio

 

 

 

…and much more, depending on your company’s needs and requirements.

 

•       Update all supplier information

 

Short-term or long-term, supplier information can keep changing with respect to location changes, acquisitions, and so much more. By updating all supplier information, you can ensure that your account payable staff is up-to-date about any changes. This can help avoid any confusion and problems in the future. To do this, companies can invest in good accounts payable software that can help customise all changes and keep all information up-to-date. These software also have a supplier portal where the staff can view all updates and changes.

 

•       Incorporate user controls

 

User controls are very important for accounts payable. User controls ensure that only authorised personnel have access to all important accounts payable information and updates. Here are some user controls:

 

•       Role-based access control: This function makes sure that only those who have access to all information are able to view it. This is one of the most important functions of accounts system software.

•       Audit logs: This function helps track all activity and transactions. This function is also what makes pointing out fraudulent activities easier.

•       Transaction authentication: This ensures that all activity and transactions are made or authorised by a designated employee.

 

If you are looking to level up your third-party payments and accounts payable management in general, reach out to MYND Solutions’ highly skilled and knowledgeable team. Based on your requirements, the team at MYND can help you customise your user experience and help make the right decision in terms of the right software for you!