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Top 5 Proven Accounts Payable Best Practices in 2023

Accounts payable best practices
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For far too long, Accounts Payable has always been considered as a cost center or a necessary evil, relegated to some back-office function where a bunch of Full time employed (FTE) processes invoices. AP teams are visualized as surrounded by piles of files. Its only in recent times that CFOs and other finance senior executives have realized the strategic importance of Accounts Payable. It’s these times of economic recession, Accounts Payable department has the capability to make a big difference.

Here are few of the Accounts Payable best practices that needs to be adhered to by every Accounts Payable department to drive efficiency and cost savings

Top 5 Accounts Payable best practices that are a must:

1. Going Paperless-

Going Paperless can help AP team reduce the risk of delayed payments, save time and save cost 33% of AP departments still use paper invoices which are time consuming , can get lost in paper trail and are expensive Having paper invoices are way too expensive as not only paper cost is involved but additional FTE and time is required to process them. Going electronic or touchless invoice processing can enable the AP teams to go for some level of automation, which helps to reduce the manual work making the whole AP process more efficient. To know more on how businesses can go paperless, read about Zycus’ paperless accounts payable software

2. Simplify the Accounts Payable Workflow

Efficient workflows are crucial for minimizing delays and ensuring accurate payment processing. By streamlining the accounts payable workflow, businesses can enhance visibility, reduce manual errors, and boost collaboration across different departments. This often involves:

  • Automation: Implementing automation software to manage invoices, approvals, and payment scheduling.
  • Standardization: Creating standardized procedures for invoice submission, approval, and payment processing.
  • Collaboration: Encouraging regular communication between procurement, finance, and vendor management teams.

To know more on how businesses can simplify their workflow, read about Zycus’ AP workflow software

3. Eliminate AP Fraud and Check for Duplicate Payments

Accounts Payable fraud is a persistent issue that could have detrimental financial effects. It is crucial to implement effective steps to prevent fraud and avoid making duplicate payments:

  • AI-Led Fraud Detection: Employ artificial intelligence and analytics to find patterns that might indicate fraud or duplicate payments.
  • Regular Audits: Performing routine audits to confirm that payments are accurate and in accordance with contract terms.
  • Implement Security Measures: Including security procedures like secure access control, two-factor authentication, and recurring access audits.

4. Look Around for Discounts

Utilizing volume-based discounts or early payment discounts might result in significant cost savings:

  •  Negotiate Payment conditions: Discuss payment conditions with vendors that provide incentives for on-time payments.
  • Utilize technology: Use software to locate and automatically capture any discounts that are offered.
  • Dynamic Discounting: Keep track of vendor-specific discount programs and sign up if necessary by monitoring vendor programs.

To know more on how businesses can look for discounts, read about Zycus’ dynamic discounting software

5. Improve Vendor Relationships

Effective AP management requires good vendor connections, which is a crucial component. More favorable conditions and easier transactions result from the development of trust, understanding, and collaboration:

  • Communication Channels: Establish frequent communication channels to go through expectations, performance, and feedback.
  • Transparent Behavior: Adopt transparent behavior by disclosing pertinent information and being upfront about your payment terms.
  • Vendor performance management: Assess vendor performance and offer recommendations to promote ongoing development.

Conclusion

Accounts Payable is no longer just a back-office function; it plays a strategic role in an organization’s financial health. By adhering to these Accounts Payable best practices, businesses can transform their AP department into a profit center that contributes to growth, efficiency, and strong vendor relationships.

Whether you’re a seasoned AP professional or a business seeking to improve your financial operations, these Accounts Payable best practices represent a significant opportunity to add value to your organization. The blend of technology, negotiation, strategic relationships, and vigilant oversight lays the groundwork for a thriving, resilient AP department.

Zycus’ accounts payable automation software (APIA) solution offers holistic AP transformation with AI-led automation. With Zycus’ accounts payable automation software, enterprises can achieve a greater degree of invoice automation and drive AP transformation via cost- efficient invoice processing, better supplier communications, dynamic discounting, fraud detection and global compliance. It offers a template- free approach to invoice data extraction and processing and delivers a greater degree of STP with high accuracy at a lower cost of ownership.

It provides users with dedicated features and capabilities for invoice content compliance, e-invoice compliance and tax compliance. Anomaly and fraud detection capabilities include identification of fraud cases (e.g., duplicate invoice and phantom vendor) and safeguards against phishing and spoofing. Better supplier communication is achieved with automated email review and reply via AP Smart Desk.

Related Read:

  1. Blog – Paperless Accounts Payable Best Practices
  2. Blog – AI-led AP Automation for Anomaly and Fraud Detection
  3. Blog – How to get started with Accounts Payable Automation
  4. Blog – 4 Pillars To Accounts Payable Automation
  5. Streamline Your AP process with Paperless Accounts Payable Software
  6. White Paper – Accounts Payable Cheat Sheet for Detecting and Preventing Supplier Frauds
  7. White Paper – 4 Pillars to Accounts Payable Automation
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