As the United States grapples with economic uncertainties – from stock market swings to concerns about recessions/slowdowns to pandemics – there’s a lot of advice offered about what to do with your money and your health.But what about Accounts Payable? How can you protect that?
After all, you’ll always need to process your invoices, pay your vendors, and keep the lights on, even with remote or skeleton workforces at your company (or at your vendors’ companies).
Here are 7 ways you can make your invoice processing withstand any economic challenges. Hint: they’re all electronic.
1) Use an Automated AP Solution Designed to Handle Lots of Invoices and Suppliers Efficiently
Unlike other industries, real estate companies receive thousands of invoices each month. They often do business with anywhere from 2,500 to 28,000 suppliers, ranging in size from one-person landscaping firms to Fortune 500 companies, according to Nexus data, which we’ve gathered over the years as the leading procure-to-payment automation company in real estate.
That means the invoices will keep coming, no matter how many - or how few - people you have on staff to process them.
Automating invoice ingestion and processing is a good first step. Instead of manually opening invoices, scanning and coding them, and then sending them off for approval, you can do it in just a few clicks with an automated AP processing software. Plus, you’ll have far greater visibility into actuals versus budgeted costs, most over budget (and least over budget) regions/properties, and other helpful insights.
2) Use Electronic Purchase Orders - Integrated with Invoicing - to Reign in Procurement
Requiring a purchase order before making purchases often seems like a cumbersome requirement, especially for the real estate or hospitality business, which need to move fast in the face of thousands of purchases each month. But converting purchasing to electronic rails – and integrating it with your invoicing - changes the game entirely.
Instead of flying blind on whether purchases are within budget, companies can easily compare all proposed purchases against budget data (stored in their General Ledger). They can also set up workflows to make sure all purchases are approved before being submitted to vendors. All with clicks and keystrokes.
Then, once the purchase is fulfilled, the purchase order can be flipped into an invoice, reducing double data entry and keeping everything kosher.
3) Enable Suppliers to Self-Serve AR Issues – On Their Time
The best AP automation companies have portals where suppliers can easily upload and submit invoices directly to your AP team. This is a huge time and money saver because you don’t have to open envelopes or route invoices via email.
Moreover, unlike the mail or email, uploading and submitting invoices via a portal is secure and guaranteed. So, there’s no more “my invoice got lost in the mail.” Suppliers should be able to verify invoice status at a glance – submitted, approved, rejected, on hold, and paid – without ever needing to call your team.
They should also be able to connect with more than one buyer – so checking the portal is just part of their daily routine not a one-off.
4) Standardize and Optimize Your Invoice Approval Workflows for Greater Clarity on Liabilities
Making sure your approval processes are standardized and optimized is an underrated, but very important step toward reducing invoice processing legwork and gaining greater clarity on liabilities. For example, having an approval workflow for each property can increase errors, slow down processing time, and be a nightmare for auditors. Thus, it’s important to group like approval processes together – like regions, or over-budget amounts.
Make sure your accounts payable software has easy-to-edit workflows, as well as safeguards that prevent just anyone from changing the workflow.
5) Consider Integrating E-Catalogs with Your AP Automation Software for Compliant Purchasing
With some best-in-class AP automation platforms, you can embed supplier catalogs directly into the software to make purchases quickly and simply. Anyone from the janitor to the CFO can select the items needed – from approved vendors – put them into a shopping cart, and then submit the purchase order electronically. This helps keep costs down because purchases comply with corporate rules and adhere to pre-negotiated pricing. And it’s all done within one platform.
6) Try Electronic Payments Instead of Checks for Cost Savings and Greater Efficiencies
Some of the greatest time and cost savings come from reducing or minimizing the number of checks you write. Not only can you eliminate material costs like paper stock, ink, envelopes, and postage - and the need to be in the office - you can also eliminate the time required to manually cut and send these checks. These expenses can really add up - the Wall Street Journal reports it can cost anywhere from $4 to $20 to issue a single paper check.
Moreover, with virtual payments, you don’t need to be in the office to run the payment file or to check on whether payments have been made. Approvals are all done electronically too.
7) Tap the Mobile App - While Out of the Office
Even when the AP team isn’t in the office, they’ll still need to review/approve/reject purchase orders and invoices. That’s when a mobile app for your accounts payable software is really useful. It should integrate seamlessly with the desktop version and honor all settings.
Keep Morale Up with Paid Invoices
Paying your suppliers on time is always a good idea. You need them to be responsive – so they can fix that elevator at a moment’s notice. Or, repair your lobby when Mother Nature unleashes her fury. You also don’t want to incur late fees.
But this can become trickier during uncertain economic times, when you or your vendors work with reduced headcount. Thus, it’s imperative to future-proof your AP, and make sure your transactions are frictionless – and electronic wherever possible.