As a small business owner, you're used to performing a balancing act on a daily basis. Between the calls to make, emails to forward, meetings to schedule, and clients to impress, it can be easy to let invoices fall through the cracks.
Yet, the reality is that when you fail to keep up with your Accounts Payable or AP process, late fees aren't the only impact you'll feel. You could also lose face with vendors and suppliers and damage potentially lucrative partnerships along the way.
Today, we're sharing a few quick tips to help you improve this process, ensuring you pay on time and maintain those valuable connections.
3 smart ways to improve your AP process
- Go Paperless
Chances are, there's a stack of paperwork already sitting on your desk. Add bills and invoices on top of that, and you're looking at a mountain. In fact, studies reveal that the typical U.S. office worker uses up to 10,000 sheets of paper per year.
To improve your accounts payable workflow and reduce waste, go paperless anywhere you can. For your regular vendors, select automatic bill payments to occur on a set schedule.
For all others, request those parties email you an electronic invoice as incurred. From there, you can import it into your accounting software and take care of the payment in a few clicks.
- Standardize Your AP Process
Late or missed payments are bound to occur if you don't have a set system in place for handling, organizing, completing, and filing your invoices.
Establish a central location at your workplace where all invoices reside. From there, order them by both date and priority, placing the nearest deadline on top.
Then, a simple accounts payable aging report can help you keep track of all your due dates.
This way, you can see your vendors listed out in one column, along with their timelines for payment. Generally, these timelines occur every 30 days, so your categories should look like this:
- 0-30 days
- 30-60 days
- 60-90 days
- More than 90 days
This can be a helpful way to keep track of upcoming and missed payments, but it's only effective if you manage it correctly and clean it up regularly to ensure all data is current.
- Outsource Your AP Needs
One surefire way to make sure you don't miss a beat on your AP workflow is to outsource the task to a third-party provider.
Trying to manage your accounting processes internally can easily take up a significant portion of your workday. These are hours that should instead be devoted to mission-critical tasks. By allowing an outside team to take the reins, you're also freeing yourself and your employees from the headache often associated with managing your finances in-house.
Above all, be sure to work with a reputable team of industry-certified and qualified professionals — like MGA! This is your bottom line that's at stake, so do your due diligence before signing on the dotted line.
Trust MGA to take care of your AP needs
We know you're busy. We also know you care about the integrity of your business and your relationships with outside providers. When it comes to paying your invoices on time, you can't afford to slack off or take a sick day. This can quickly turn the AP process into a managerial burden.
That's where we come in.
Our Financial Accounting Support Team (F.A.S.T.) provides a full range of accounting, controller, and financial management services and is ready to give you back your peace of mind. When you trust us to take care of your AP requirements, you can rest easy knowing you're in the right hands.
Reach out today and tell us a little more about your business needs. We'll help you problem-solve together, one step at a time.