Accounts payable (AP) and accounts receivable (AR) are two sides of the same coin for any organization. They determine the cash flow of the business and the company’s working capital, making them both two of the most important processes run by a finance team. Both processes are critical as well as resource-intensive—demanding time and people with the right skills.
Several businesses have been outsourcing their AR and AP functions, and the reasons for outsourcing these functions could be one or more of the following:
- Cost savings
- Access to specialized expertise
- Faster processing and stronger relationships
- Scalability and flexibility
- Freedom to focus on core business priorities
Cost savings would perhaps appear at the top of the list of benefits of outsourcing AP and AR functions. This is because, in addition to the cost of staff salaries and benefits, companies also have to invest in training the staff regularly, considering that processes and compliance requirements keep evolving. Apart from this, building a capability like this in-house requires the right infrastructure and specific enterprise software licenses that could be costly. All of this adds up to a fixed cost for the company, irrespective of invoice volumes.
Outsourcing changes this dynamic. Many providers price their services by transaction or outcome, so costs track actual volume, instead of being a fixed overhead. Outsourcing providers already have most of the required software licenses.
Several global companies choose to outsource AP and AR so that they can utilize the expertise of the outsourcing partners. This also removes the burden of hiring and training in-house for a very niche function. Such outsourcing partners with their specialized expertise bring standardized processes and rigorous quality checks to ensure that errors in AR and AP are reduced to a minimum. When errors are reduced, there is automatically a better adherence to regulatory and audit requirements, since compliance depends a lot on accuracy in financial bookkeeping. As per the Ardent Partners’ Accounts Payable Metrics That Matter Report in 2025, 75 percent of AP departments worldwide now use some form of artificial intelligence (AI) or automation, indicating that expertise today increasingly means fluency in AI or automation, which in-house teams might not have built yet.
When AR and AP are outsourced, AI and automation tend to make both functions faster, which in turn leads to invoices getting paid sooner. Metrics such as Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO) are kept in a healthier range leading to better working capital.
Vendors notice when payments arrive on time, and that consistency builds goodwill. On the collections side, a professional, predictable process leaves customers with a better impression of your business even when you are chasing a payment.
Business volumes keep changing. There could be seasonal spikes, new client onboarding, or a temporary dip in demand that could all send AR/AP workloads swinging in different directions. For an in-house team, such variations could be challenging. Outsourcing providers are able to scale up or down the operations depending on the specific requirement at the time. This means that scaling a business is not just about handling growth or adding headcount, it is also about rightsizing AR/AP capacity to match the existing demand.
Every business is started to solve a problem, create value and generate returns to benefit stakeholders. When businesses outsource certain critical aspects of running their operations to other companies, they are able to focus on their core strengths and revenue growth rather than tying themselves up in knots to carry out jobs that are not part of their expertise. Further, this frees up internal finance teams for strategic work that includes forecasting, analysis, and decision making. The administrative burden on the company leadership is also reduced.
Accounts payable and receivable will always be essential for the effective running of any organization. However, it is no longer essential for these to be handled completely in-house. Businesses see immense value when AR/AP are outsourced to external organizations or partners who bring their expertise to the table. When these are outsourced, it frees up the business to focus on its strengths, where its real value is created.
How can Infosys BPM help
Infosys BPM, a Gartner-recognized leader in finance and accounting (F&A) outsourcing, offers end-to-end procure-to-pay services covering the full accounts payable and receivable cycle, from invoice processing and vendor queries to payment disbursement and reconciliation. Powered by AI, optical character recognition (OCR) and robotic process automation (RPA), its platform enables touchless invoice processing, predictive DPO insights and 99 percent invoice accuracy. With experience managing over $95 billion in spend and 52,000 active vendors, Infosys BPM helps businesses cut costs, reduce errors and strengthen supplier relationships.
