Accounts payable is responsible for maintaining the purchasing history of your business. It should document every dollar you spend with timely and accurate records. The process is complex, yet critical for any business. Luckily, accounts payable document management can be simplified with the right strategies and software.
Accounts Payable Workflow
The process begins with a purchase. A purchase order is sent to the vendor, who submits an invoice to the accounts payable department. The department will then verify the invoice, code the invoice to the general ledger, conduct a match with purchase orders or receipt reports, and route it for approval. Once an invoice is approved, it can be processed for payment.
The process creates a paper trail of purchase orders, receipts, invoices, payment terms, vendor correspondence, and more. Over time, it generates thousands of documents that need to be retained for compliance, audits, and invoice exceptions. Documents should be safely stored and accessible to check the status of any outstanding or made payments.
Why is Accounts Payable Document Management Important?
Accounts payable is responsible for producing an accurate balance sheet for your business. Tracking what is owed to vendors, properly approving payments, and processing those payments make this possible. Efficient document management is important because:
- Accurate books yield accurate cash forecasts, optimizing your working capital.
- Quick payment processing builds positive relationships with vendors that can lead to favorable payment terms and discounts.
- Precise processing prevents payment mistakes and fraud.
Best Practices for Accounts Payable Document Management
Accounts payable document management will vary based on the specifics of your company. You will need to find a customized approach that works for your industry, staff, and customers. Using the following best practices will help you reach make your document management efficient and effective.
Streamline Your Processes with Automation
Paper-based accounts payable document management is inefficient. Documents can get lost, storage is expensive, and real-time tracking is impossible. Automation software streamlines the process, allows you to go paperless, and enhances accuracy and accessibility. Automation software is key in keeping your accounts payable documents organized and visible.
Paperless Processing
Paperless processes save time and improve accuracy. Businesses will benefit from functionality advantages and discounts due to expedited payments. Reduced paper usage and digital record storage will also reduce costs for your company.
Centralize Your Records
Invoices should be entered into your system promptly and kept all in one place. Centralizing your records improves efficiency and accessibility. A shared service environment also helps staff members follow your business standards and measure their performance against established metrics.
Be Prepared for an Audit
An auditor can show up at any time to review your documentation. Failing to accommodate an auditor can prolong the process and increase the cost of the audit. Automation software stores your records in the cloud in an audit-ready format that meets Sarbanes-Oxley and other privacy requirements.
Automate Your Accounts Payable Document Management with Record Nations
Record Nations can streamline your accounts payable document management with DMS services today. Our experts will quickly set up an automated system that works with your unique needs and existing processes. Give us a call at (866) 385-3706 or fill out the form to receive free quotes on our services and connect with providers near you.
