Should You Outsource Your Accounts Payable Department?
In the constantly growing world of business and finance, organizations of every size find themselves paying other businesses for more and more services. But, despite recent strides in technology, many organizations still rely on manual, paper-based invoicing and payments. Imagine, a room full of employees signing paper checks, folding documents, licking envelopes, then dropping them off to be painfully mailed out via “snail mail.”
It might not seem that significant—as long as vendors get paid, what’s the difference?
But the difference is a whole lot of money. Vendors don’t like to get paid late, even if it’s not your organization’s fault. Plus, humans are notoriously prone to errors, and those errors can stack up in late fees, legal costs, and bad will. It doesn’t take much to get a reputation as a company that pays late. Luckily for you, it doesn’t take much to avoid that reputation either.
The solution is to outsource your accounts payable department. Companies that prioritize accounts payable use automated systems and research-proven best practices to deliver satisfactory and timely payments every single time.
CFOs and finance departments who outsource the payables function free up huge amounts of time so that they can focus on more strategic initiatives. And yet, many companies are falling behind. It’s understandable, there’s a lot of fear associated with change—especially when things have been done a certain way since the company’s inception.
Let’s look at a few of the common concerns finance professionals have with outsourcing their accounts payable process.
- Lack of Oversight
Managers at small companies are used to being able to check in on every aspect of their operations. Even if they avoid micromanaging, they still find comfort in the knowledge that they can easily check-in.
Finding the right AP solution will remove that nagging feeling in the back of your head. After just a few months of a streamlined process, you’ll see the added benefits of decreased errors and quicker payments.
Today, no matter what industry you’re in, data and privacy are a top concern. The idea of handing over financial information to another company is nerve-wracking. What if there’s a leak? Won’t we be held accountable even if we’re outsourcing the work?
Companies that outsource their AP to fraud-conscious organizations will find themselves at ease. Automation companies build their products with security in mind and are consistently adjusting their systems to account for new threats. A company whose sole focus is accounts payable will be focused on implementing all industry standards of digital security. In some cases, outsourcing this process is outsourcing the risk of a breach.
As with any new process, management sometimes finds conflict with established employees when introducing new technology. People are comfortable with their established workflows—it’s been fine for this long, so why change?
Adequate training is always a necessity when bringing new concepts and processes to your business. AP companies focus on streamlining this step and designing their software to be as simple and user-friendly as possible. You’ll find that even your most stubborn employees will be thankful for the added time savings.
So, what’s the bottom line? Is outsourcing accounts payable worth it? With several of the above concerns addressed, it’s time to look at a few of the biggest benefits of outsourced AP solutions.
- Reduced Overhead
Outsourcing your accounts payable is more cost-effective—plain and simple. With all the added benefits, you might expect it to put a dent in your budget. But, when you factor in reduced errors, improved compliance, and reduced headcount, outsourcing this back-office task will lead to huge savings.
Payments software changes rapidly just like everything else in the digital world. By outsourcing this step in your company’s process, you don’t have to keep up with the tech yourself. Forget researching updates and re-training your staff for every leap forward—leave that step to the experts.
As SMBs scale, accounts payable can quickly become an insurmountable pile of paperwork. This can get out of control quickly and waste valuable resources as your company expands.
Don’t let your success become a liability—the same methods you used when you had a hundred clients doesn’t necessarily work as you grow.
- Ease of Access
AP solutions prioritize ease of use and accessibility. No more digging through files or emailing that one team lead in accounting. Instead, rely on proprietary software designed for you to pull the data you need in just a few clicks.
It’s time to focus on the future of your company and consider outsourcing your accounts payable department.