Best practices to manage the accounts payable process
After the challenges faced by businesses in 2020 and 2021, nearly 60% of CEOs anticipate an economic boom over the next two years. And sensing the opportunities on the other side of the crisis, businesses are prioritising digitalisation as one of the top strategic priorities in response to changing technological capabilities and revenue models. The accounts payable (AP) process, an integral part of accounts and financing operations, is no exception to this digitally focused strategic approach. In this blog, we will discuss some of the best practices in AP process management.
Importance of and challenges in the AP process
AP is one of the higher, if not the highest, stakes tasks for any business. If your business is unable to pay on time for the goods or the services, maintaining a working relationship with your vendors and suppliers becomes tedious. Boiling down to a few simple steps of invoice receiving and data entry, approval, and payment execution, the AP process seems simple enough. But it is also one of the business areas most vulnerable to fraud. And without an appropriate AP process management protocol, it can be easy to miss fraudulent invoices or payment requests that can cost the business a significant amount of money.
Apart from the possibility of fraud, human error, the time required to process invoices, difficulty scaling with growing business, and consequently strained relationships with vendors are some challenges in AP process management. Implementing best practices in the AP process can resolve many of these challenges and help you in adapting to the rapidly changing business landscape.
Best practices in accounts payable
As one of the high-stake tasks, the AP process is complex and can be challenging to manage efficiently. Here are some of the best practices to manage your AP process:
- Focus on accuracy: Accuracy is inarguably the most important aspect of AP process management. Several potential points of failure, such as invoicing, data entry, payment execution, and data inaccuracies, can lead to errors in payments processing. Businesses need to focus on maintaining accuracy at every step and sustaining confidence through good relationships with vendors and suppliers.
- Safeguard against fraud: AP process is highly vulnerable to fraud. And with AP frauds becoming more sophisticated, businesses are scrambling to detect and prevent such events. But with stringent safeguards in place, such as strict access control and AI-powered incident flagging, you can identify potential threats, assess the situation, and safeguard yourself against AP fraud.
- Centralise the process: Decentralised AP processes can increase the possibility of human error and even leave you susceptible to fraud. But with digital tools, you can centralise the AP process, making it easily manageable and improve efficiencies through better controls.
- Leverage technology: Technology is your best friend when it comes to best practices in AP. Integrating and leveraging automation in your AP process can help you reduce risks, improve efficiencies, and revolutionise how you manage AP processes.
For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.
How can Infosys BPM help?
Infosys BPM Accounts Payable on Cloud (APOC) platform is the next-generation, future-ready AP platform that enables end-to-end accounts payable automation for improved efficiency, effectiveness, and experience.