Outsourcing accounts payable tasks allows businesses to realign their focus towards the heart of their operations – key areas like product development, customer service, and strategic planning. By shifting the responsibility of accounts payable operations to specialized providers, companies can dedicate more time and resources to these core activities, driving growth and innovation. One of the key pros of outsourcing accounts payable services is that it enables businesses to improve efficiency and reduce operational costs, allowing them to focus on their core competencies. Don’t be swayed by the lowest price alone—it’s essential to weigh the overall value of the services provided, taking into account the provider’s expertise, technology, and potential impact on your organization’s bottom line. By carefully considering the cost and value of different accounts payable service providers, you can make an informed decision that will deliver the best return on investment for your business.
How To Outsource Your Accounts Payable for Long-Term Success: Step-By-Step Guide
Leveraging accounts payable outsourcing services offers a strategic opportunity to streamline financial processes, boost accuracy, and ensure compliance. However, outsourcing can come with challenges, such as potential communication gaps or reduced control over processes. However, accounts payable automation may not be suitable for all businesses, as it may not offer the same level of human oversight and adaptability as outsourcing accounts payable processes. Additionally, implementing accounts payable automation software may require a significant initial investment (or recurring SaaS fees) in software and training of in-house employees. Also, some organizations may prefer to retain direct (manual) control over their accounts payable operations.
Skilled resources & latest technology
They strive to offer cost savings, improved efficiency, and increased visibility and control for their clients. AP automation focuses on improving the efficiency and accuracy of accounts payable tasks through the use of technology. This approach leverages accounts payable software solutions to streamline processes such as invoice capture, approval workflows, and payment processing, allowing businesses to manage these functions internally.
This is essential to judge how well the outsourcing provider’s privacy and data protection measures match up to yours. Depending on the industry standards and your outsourcing provider, the data may be stored on internal servers or even on the cloud. This could increase your data’s accessibility — making it prone to unauthorized access.
- By partnering with Genpact, organizations can focus on their core business activities while an experienced team effectively manages their AP processes.
- This frees your in-house AP department to focus on higher-level tasks and attend to the core business processes that enhance your company’s performance and improve service levels.
- Companies outsource their accounts payable operations in part to gain access to better tools and processes.
- Ensure their technology aligns with your organization’s needs and can seamlessly integrate with your existing systems.
Is Accounts Payable Outsourcing the Best Choice for Your Business?
Having a clear vision of what you hope to achieve helps define criteria for choosing your AP partner. Basic expectations are obvious, demanding proven processes that ensure invoices are paid accurately and on time. Identifying your biggest business drivers at the start – and aligning your leadership team and BPO provider behind them – ensures the greatest value. For instance, you can implement Stampli’s best-in-class AP Automation software and train your team within days. Potentially reduced costs – It’s possible that outsourcing your AP duties will be more cost-effective than hiring and training your own team. You won’t have insurance, pensions, or office space and equipment to worry about, so depending on your situation, outsourcing may save you money.
Most businesses still use outdated and expensive systems like optical character recognition (OCR), or even paper invoicing, to manage their AP processes. According to one study by the American Productivity and Quality Center, the bottom 25% of organizations surveyed were paying $10 or more for each invoice they processed. The provider should have clear communication channels and be responsive to your queries and concerns.
Outsourcing accounts payable helps businesses avoid these costs while using the best document management and business intelligence tools available. There’s nothing worse than conducting an accounts payable audit and discovering errors. Depending on the rules that govern your industry, errors could even lead to compliance issues. As the business world expands and supply chains stretch farther and farther across the globe, payments to vendors and other service contractors are becoming even more complicated. Even small businesses must rely on vendors in numerous locations to deliver their products and services to customers. Although some of the differences related to these costs are based on the organizations’ industries, organizations that had adopted accounts payable automation tended to see reduced costs.
For instance, top-performing AP teams process nearly four times the number of invoices than bottom performers, according to American Productivity & Quality Center (APQC) benchmarking data. Dependency – While it’s great to be able to hand off a responsibility you don’t like or can’t fulfill, it also makes you rely on that vendor. If they experience any issues that interrupt service for you, there’s little you can do to make sure your own vendors are still getting paid on time. Book this 30-min live demo to make this the last time that you’ll ever have to taxable income vs gross income manually key in data from invoices or receipts into ERP software. The most common AP processes that are outsourced are purchase order or invoice matching (0r 3 way matching), invoice automation, discrepancy resolution, and AP administration.