Everything you need to know about accounts payable outsourcing
Accounts payable operations seem basic and straightforward, but the work is more complicated underneath the surface. A company that has hundreds of invoices has to consider the possibility of errors. Another company may have half of their invoices printed on paper or written in poor handwriting. Those are just a few problems that require business professionals to learn more about the benefits of outsourcing accounts payable tasks.
Differences between bookkeepers and accountants
The terms bookkeepers and accountants are used interchangeably, but the two professions are separate and distinctive. Bookkeepers and accountants both handle accounts payable tasks that include paying bills and using advanced accounting software. You can hire either type of professional to handle AP tasks. For detailed reports and analyses of your company’s liabilities, the best choice is to hire accountants.
Types of accounts payable services
There are different methods of handling accounts payable processes. In addition, there are different types of AP services available, such as:
• Two, three or four-way matching
• Data entry
• Tax Processing
Matching is the process of comparing invoices to the purchase orders. Three-way matching includes matching the receiving report and ends with the payment. Four-way matching is optional and includes an inspection report. Most accountants use software to match documents automatically; however, it’s possible to perform matching manually.
An important task of accounting is auditing. This process is necessary to prevent fraud and errors that occur inside or outside of the company. Employees can embezzle money from the bank accounts, and outsourced providers can steal personal information from the accounting records.
Auditing is another service that’s provided by outsourced companies. A third party reviews the company’s documents to look for clerical errors and signs of fraudulent transactions. Auditors mainly check documents to verify the correct entries and check the standards based on generally accepted accounting principles (GAAP).
The most qualified outsourced providers use automated software. Automation allows them to perform their duties quickly and efficiently. These benefits vary from using auto fill to complete invoice forms to making payments automatically with a few clicks of a button. The matching system is completed within seconds, and the invoices are immediately stored within the company’s financial system.
Accounting includes the option to track and report the financial progress that is being made within the company. This includes keeping tracking of negative actions, such as late penalty fees and interest payments, that are hurting the finances. An example is a comparison report of the interest payments that were paid over the last five years. Reports are made to provide a detailed analysis of this information. Reporting helps companies to visualize their errors and identify the areas where they need to make improvements.
Outsourcing is the solution to streamline the operations of a business. A small business benefits from not having to set up an expensive accounting department. A large company benefits from hiring others to manage hundreds up to thousands of financial transactions in a short amount of time. Stampli provides the fast, automated solutions that your business needs to save time, money and effort. Its professionals are available to help any individual or company that needs accounts payable outsource services.