Accounts payable is money that is owed by a business to its suppliers. Although it’s a back-office function, increasing payables is essential to capital optimization. Management of and the strategy behind the accounts payable process directly affects cash flow, working capital, and relationships with suppliers.
Irrelevant of where your business is in the optimization process, three aspects can generally be improved on in the accounts payable process.
By standardizing and streamlining the invoices, your business can reduce the amount of staff needed to manage payables and minimize late payment penalties. If you’re further down the line in your optimization, automation can save money by reducing staff, human-related error, and cost of materials (paper).
Honoring your payment terms with suppliers, or evening creating a habit of paying early can can build tremendous trust. Trust can lead to a positive working relationship that evolves toward mutual benefit that can improve customer service, lead to better products, and inventory consistency.
The biggest benefit of optimizing payables is that it frees up working capital and cash flow; however, not all those involved in the account payable process understand the impact their job has on the company’s growth. By creating a culture around the importance of payable optimization, you align employees around the bigger picture of fueling growth.
Pipefy’s Accounts Payable Template is made-up of 5 phases: Screening, Approval, Payment, Paid, and Cancelled Payments. Each phase is designed to help you streamline and standardize the Accounts Payable process.
All incoming invoices arrive in the the Screening phase of the pipe. In this phase, invoices will be reviewed and assigned to the person responsible for authorizing the payment.
Next is the Approval phase where the assignee can approve or disapprove of the payment. They can leave a comment explaining why the payment was approved or disapprove if they choose.
Once the payment is approved, the card moves onto the Payment phase where you will be prompted to select a payment method from a customizable drop-down window. In this phase you can set a reminder to notify you to check on the status of the payment.
Last but not not least, the card is moved into the Paid or Cancelled Payments phases. All information collected can be stored in Pipefy’s secure database to help you standardize and minimize risks.
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Best practices for streamlining the Accounts Payable process
Automate purchase and payment processes
Automation saves time and reduces human-related error in your accounts payable process.
The more of your accounts payable process you can put online or run with software, the more money you can save.
Connect key suppliers seamlessly
Ensure inventory stock level is at its best by connecting key suppliers to your online accounts payable management system.
Keeping track of invoice data in one place, helps you streamline the payment process and accurately pay invoices.
Take a proactive approach to accounts payable by setting up reminders and anticipating expenses.
Standardize accounts payable workflow
By standardizing the payment process, you can leverage repetitive to reduce errors and better implement workflow automation.
Pipefy is a powerfully customizable process management software that allows you to build and manage processes without IT skills or code. Reduce the time spent on repetitive tasks and connect F&A processes end-to-end for improved efficiency.
- Send emails and email templates directly from the platform
- Establish execution standards to enforce standardization
- Set-up SLAs and reminders so you never miss a deadline
- Automate repetitive tasks and workflow
- Incorporate suppliers into the workflow with public forms
- Use metrics and the secure database to make data-driven improvements
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