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How to Optimize Your Account Payable Department

ap-automation-increases-eff (1)Large numbers of organizations are taking measures to upgrade their accounts payable activities this year.  According to a recent survey, outsourcing account payable (AP) activities can be a useful strategy for driving the improvements in AP functions of any business. The survey revealed that account payable departments that chose to outsource invoice processing were successful in reducing their cost by 25% per invoice. This strategy also enabled them to reduce the time required for processing invoice by 27%. Besides this, the study also recommends that leveraging account payable process mechanization and centralization of invoice receipt can also help in reducing cost and enhancing efficiency.

Outsourcing data conversion and front-end invoice imaging are two most preferred services in account payable processing.  It is with this approach the invoices are sent to the service provider, via email accounts or a managed mailbox. The invoices are then scanned and uploaded by the service provider to upload the bills into their respective file capture system. Nevertheless, the ideal practice that a service provider should follow is to capture all data from scanned invoices with the help of special software known as Optical Character Recognition. At the same time, they should also authenticate and put the scanned data into the ERP system of their client.

As per the survey respondents, businesses that prefer outsourcing invoice processing starting from receipt and ERP data entry do far better than businesses that do not outsource AP functions. Moreover, lesser cost per invoice, along with faster cycle time of processing makes it possible for each employee to process more than double invoices per month. Besides this, outsourcing enhances the exception rate by 32 percent.

Many global brands have significantly enhanced their AP invoice processing by outsourcing.  Their outsourced processes consist of AP process mechanization and centralized invoice receipt. Consequently, they are in a position to complete their invoice payments more rapidly. Once an invoice is scanned and if the data fields on the invoice match with the database of the company, the digitizing process takes only few seconds and the company gets the invoice within 24 hours.

Taking into consideration the advantages that outsourcing account payable activities can contribute to one’s business, many organizations are gearing up to follow this outsourcing strategy to gain immense business benefits. It is high time for you to think about AP activity outsourcing as it will help you to –

1.    Reduce your cost bases
2.    Focus on service delivery
3.    Get your AP activities done more accurately and a lot faster.

Authored by mdsonline.co.in

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