Business operations are becoming complex and more difficult to manage day by day due to increase in new accounting standards, changes in laws and regulations in order to better regulate the corporate sector of the economy.
The influx of a huge accounting data from basic data entry of accounting transactions till finalization of financial statements may be challenging and difficult to manage even for small and medium industries, if not taken proper measures with the changes in technology and accounting standards.
This may distort the financial health of any organization thus it should change its strategies with the changes in technology and accounting standards.
To cop with the challenges of modern era the sage has developed an accounting software names as Enterprise Resource Planning (ERP) through which one can digitize, centralize and integrate all the functions of the organization like paperless to your accounts payable.
Through this software an entity can integrate its procurement function with its vendors accounting software in order to reduce time between placing an order and the delivery of raw material and product components and also minimises the risk of stock outs.
Thus sage is very beneficial to every kind of entity whether engaged in manufacturing, service sector or non profit organizations, it can save time, money, and storage space.
Advantages of sage software
An organization can be managed through different functions or departments such as procurement, sales, marketing, research and development, human resource and information technology.
Sage software integrates and interlinks the accounting data from all components of the organization but in this article we will a bit more focus on how to paperless accounts payable through using sage software.
There are countless benefits of ERP software. The discussion of every technical aspect of this software at length is not possible in a single article but will try to brief most prominent advantages. These advantages are as under:
- It saves the time, money, and storage space of the user entity. The manual procedure of handling accounting data requires enough storage space, manpower to handle the files which also requires labor cost and also plenty of time to handle the hard files however the sage has reduced the cost of all the relevant factors
- The nonusage of paper in recording and maintaining accounts payable as well as other accounting data is most eco-friendly.
- It gives real-time access to employees of all functions around the globe, which lessens many complexities for the user entity especially for the bigger entities such as the multinational companies and global organizations.
- Every authorized person responsible for parking and analyzing accounts payable can have real-time access to the organization’s data which smoothens the operations of the business entity.
- ERP software has immensely reduced the cost related to printers and papers, which was required under the manual method of bookkeeping.
- Invoices from vendors can be easily attached in the software for record purposes and can also be used for the aging analysis of payables.
- Technical as well as human errors can be time to identify and settle the issues before finalization of the accounts.
- Sage has reduced the risk of duplication to almost zero because of its built-in potential of pop up messages in case of duplication.
- Authority checks can be applied as per the authority matrix of the organization this can minimize the risk of the presence of fake vendors.
- Security checks can be applied so that only authorized personnel can access the data and this ensures the accountability of the responsible employee as well as the authenticity of payables.
- Accounting information related to the payables and other accounts heads can be easily traced in case of need in an emergency situation.
- The prime benefit of this software is that it can be easily customized as per the accounting needs of the user entity.
- Some countries have strict regulation to maintain the accounting records for a specified time, the software has made it easy to keep safe maintaining accounting records.
- Physical records can be easily manipulated and destroyed, the maintenance of accounting records in soft form has almost reduced the risk.
Thus in a nutshell, the usage of sage software for recording and maintaining the accounting data relevant to accounts payables as well as other heads are not only safe but also very economical because it has immensely reduced the time, money, and space requirement for handling the accounting records in the form of files.
This results in free and fair financial statements which are the ultimate tool for the user of financial statements such as investors, financial institutions, and taxation authorities.
Creating a paperless account payable seems like a daunting task but it hosts numerous benefits that save time, money, and storage space. The saving of these three things proves a success for the businesses.
However, switching to a paperless account does not happen overnight nor it is easy. But it is definitely worth it which is why this article explains the process of going paperless.
In order to head towards the paperless accounts payable via software, the accounting process should be digitized. It is necessary to realize the paperless goals and take a record of the present process.
The software will implement an automation process and it is important to have a meeting on this with the team so that no conflicting opinion is raised.
Steps to Paperless Accounts Payable
Keep an eye on AP
Before planning to implement the paperless process, understand and familiarize the current account and where it stands. The present workflow should be monitored. Basically the things which need to be understood are the time taken to process an incoming invoice and the expenditure an invoice needs on average. Brainstorm and ask questions before jumping into the implementation step.
Have a meeting with the CFO, AP managers, and other staff members in order to have a better grip on the AP. Set the goals for automation and communicate with others. Ask for approval from everyone. Discuss the type of automation system to use for the account.
Things that need discussion are the amount of money that can be saved by automation, what the AP employees will do in the free time and the total sum of money required.
Take approval from everyone
Making a paperless accounts payable affects the whole company, not just an individual. Therefore, it is crucial to get everyone at the same level of understanding before actually doing it.
Mostly it is the upper management or the IT department which is not in favor of any changes so in order to avoid resistance, talk about their concerns. Moreover, the management team asks for
evidence in order to make sure that the paperless account is cheap and it improves the business. As for the IT team, it gets curious about how the compatibility, resources and security within the company will be affected. The staff is concerned whether they will be fired and how the business will be affected.
Base decisions about paper
The degree of automation which should be implemented is crucial to talk about. Therefore, understand where the process of your accounts payable stands and how many people are in favor of automation.
Eliminating the use of paper is not possible which is why it should be decided how far with automation the business will go.
Some options include making payments via paper checks like before but storing the AP information by digital means. Or the invoices can be digitized while the paper files of the incoming invoices are stored. Do note that all these decisions depend on the needs and requirements of the company.
Set Custom Tolerances
In order to process invoices, custom tolerances are set up in an automated system. A competent software for automation is the one which not only codes the incoming invoices automatically but also routes them for getting approval by electronic means. The user can enjoy full leverage and authority over the automation process.
Select an automation supplier
The software requires a good supplier. The software should implement the system as fast as possible. The cost expenditure on the implementation and if the system is compatible with the current ERPs are some of the concerns which need to be solved before practically doing it.
Also, inquire about how much the business can be expanded with the supplier and how efficient the reporting tools are. It is best if the software offers a free trial. The software which is the best at implementation is NextProcess.
Adapt to the new system
After the software is implemented, learn and get familiarized with the new system. Check to see if it is functioning properly. The invoices get processed
automatically and those invoices which are not compatible with the customized tolerances or need manual approval are sent to the respective manager.
Re-engineering the account processes to paperless is a huge milestone that every business should be prepared for. While there are many methods to go paperless, the software method is the most preferred one as it is safe and fast.
With so many businesses and companies choosing paperless accounts, it is evident now that the only reason it is getting popular is that this version offers many benefits. The revenue and exposure of the company can be increased by switching to paperless accounts. This article reveals how choosing the QuickBooks in allowing the implementation of paperless accounts payable is a wise decision.
In the accounting world, QuickBooks Online provides a cost-effective, customizable and scalable software solution for Accounting.
Third-party applications can be leveraged by QuickBooks. A lot of features to manage the documents and Accounts Payable automation process can be found in the App Centre of QuickBooks.
Benefits of QuickBooks
Improved accuracy of data
The accounting records and information should be correct and precise. QuickBooks eliminates all types of keying errors and mistakes in each data point by the paperless Accounts Payable workflow.
Features are introduced by QuickBooks which increase the dependability and accuracy. These features are pre-populated data and SmartCoding.
Transparency of Accounts Payable
QuickBooks allows full visibility of the expenses and allows easy tracking of the Accounts Payable. Moreover, it also shows the things in progress which drastically improves the cash flow so that you can take better decisions. In progress, the supplier invoice totals are made visible prior to getting posted on QuickBooks.
By allowing this information to be accessible to the users, the forecast reports can be generated by seeing the committed expenses. This visible information enhances the cash flow and companies irrespective of the size will get benefits.
Electronic invoice approvals
It takes a lot of time and energy to get approval from supplier invoices and checking the costs especially when the business has various locations.
With the help of QuickBooks, the frauds and errors are eliminated along with a deduction in the budget expenditure. The advantage of the invoice approval workflow is obtained from the electronic capability.
Immediate access from all locations
By using the QuickBooks Online, better and improved access to the data files is given as compared to the desktop version. Nevertheless, the full Accounts Payable workflow can only be seen after the supplier invoices have been posted.
This applies to both versions. No matter which device is being used, the approvers and the accounting teams can monitor everything in a single location with the help of the Accounts Payable automation.
Benefits of transforming into a paperless office
- Paper takes up a lot of space which after digitizing is cleared especially the filing cabinets. The thing about paper is that it accumulates rapidly which makes it almost impossible to organize. Most industries especially the financial ones have regulations regarding the storing of paper documents for long periods of time. This means that paper cannot be thrown out for years. However, if the documents are digitized, this problem can be solved. It is better to store in the cloud rather than in the physical records archive.
- After the documents are compiled and stored using the document management software, they can be accessed anytime using any device by both clients and colleagues. Popular applications like Adobe Acrobat and Microsoft Office are also involved in managing the documents. All the files can be saved in the content management system with a simple click.
- Where the physical forms can get destroyed or misplaced, digital documents pose no such threats. It is hard to check the printing, access, and copying of some sensitive physical files as well. However, the introduction of security capabilities in document management software eliminates such issues. After setting up the granular access rights, the system administrators can permit for the visibility of documents at three levels of user level, document level, and system level. It is to note that the paperless method has more security benefits than accessing. The confidential information can be redacted, electronic signatures are set up and audit trails are created.
- When the process is improved to such a degree, it is obvious that money and expenditure will be saved as well. In a much lesser amount of time, a large bulk of paperwork can be processed as compared to a traditional office. Furthermore, no money is wasted on the printer, paper, ink office space for storage and postage. Employees are also freed from the responsibility of managing paperwork. The employees can in turn spend that time on regulatory audits and expense reimbursement instead.
Owing to all these perks and how QuickBooks has made the process of getting paperless office easier, it is time to be ahead in the game and move forward in the technological realm.
Gone are the days when businesses used to stick with the paper-based process and wrote the record of the financial records by pen and paper. In today’s digital age, bookkeeping has become paperless. More and more businesses are now going paperless with almost all company-related tasks.
Even the Accounts Payable is automated by document management software, document scanning, and more similar technological tools. This article provides a clear guide on making your account payable paperless.
Accounts Payable abbreviated as AP can be defined as the responsibility of a business to pay a short-term debt to the respective suppliers or creditors. This account is inside the general ledger.
AP can also be referred to as that division or business department which is obligated to give payments to the creditors and suppliers. In simple words, accounts payable is the amount of cost for the services and goods received which have not been paid for yet.
Steps to make Accounts Payable Paperless
1) Decide on the Implementation process
In order to do this, the current AP should be kept in a record so that it can be known which things need to be made better. Get familiar with the Accounts Payable workflow before thinking about implementing the paperless solution.
How long is the duration of processing the invoice? How is the invoice approved? These questions will give an insightful depth.
2) Communicate with the team
Do not carry out the process of automation alone without the team knowing. When the implementation process is being laid out, it is crucial to involve the team. It is possible that the changes a business owner is working on are not suitable for the employees.
The departments within a business which oppose such changes are the IT, upper management, and the accounts payable department. Therefore, it is advised to give light to all the concerns and decisions before moving forward.
3) Scan and convert the current documents
If the Accounts Payable department has an abundance of invoices being sent, it is necessary to find a reasonable way to convert the invoices into an electronic copy. This step is crucial to complete before the automation of invoice processing. Whichever method is selected for converting into electronic format, it should have the technology of Optical Character Recognition (OCR).
Another technology named Data Indexing is equally useful in this process because it forms an index that can be searched for any aspect of the document. The information involved in the document and how the information was extracted both can be known via this technology. A high level of automation and big data storage is guaranteed by incorporating such technologies.
4) Choose an AP automation solution
A reasonable supplier for the accounts payable automation software should be chosen. This step saves a big percentage of money and minimum data entry is required.
Factors that need to be taken into consideration are the cost of the system, the ease of expanding the system, the speed of implementation of the system, whether the system works with the current ERP, and how the reporting tools function.
5) Customize the software settings
In order to process the electronic invoices, a software with custom tolerances is set up. This element is found in the automated system. The user has complete control because the software allows automatic coding of the incoming invoices and routing it for approval.
A good platform adapts to the settings of each business so that it can expand. Therefore, custom tolerances should be created in order for the fast transfer of the incoming invoices.
6) Adapt to the automation process
After the implementation has been successful, it is advised that the employees test a new product and think of questions. This is done in order to adapt, learn and scale the automation process so that the team can get familiar with the new system.
Afterward, streamline operations can take place to make the business successful. The AP automation process can be scaled with the integration of the Accounts Payable department.
Benefits of going paperless
Any business can take benefits with a paperless office. The processing expenditures are cut short by removing the paper documents. This is because the paper invoices demand a lot of manual effort. The handling of the paper invoices requires time and with time, costs are increased.
A lot of money is saved by digitizing the invoices and using a paperless automated accounts payable process. Moreover, records are more easily accessible and the processing is done faster too.
Enjoy better control, organization, and an environmentally friendly way of running your business by involving paperless electronic means in the office.
During a normal course of the business, it is often overwhelming to manage all invoices and inventories in one go. In this regard, it is rudimentary for accountants to ensure that their organizational skills are top notch so that all information is readily accessible whenever required.
It is unrealistic to find single proofs in high-pressure situations that require filtering from a heap load of resources to find evidence that they need. Therefore, there is a dire need to ensure that all invoices or receipts are properly organized in order to get the best returns.
Accounts Payable, for one, tend to be highly important because of the reason that they are debts that need to be settled in due time so that the organization is able to keep their credit rating intact, and ensure that they don’t get to pay late payment surcharges.
Therefore, it is important to properly manage these resources, so that companies are able to stay on top of the things, and ensure that all the tasks are properly executed in due time.
Tips and Tricks for Accounts Payable Invoices
There are a number of tasks and objectives that should be included in order to enable organizations to help them manage their accounts payables in an effective manner. Here are a few tips and tricks that can be used to manage accounts payable in an effective manner.
- Using technology: Using technology and software can help accountants manage accounts payable in an effective manner. Going paperless can help organizations to manage their invoices in an effective manner because it helps to quickly categorize them based on respective heads. When there is a need for these invoices to be retrieved, they can easily be done so via software. It also helps to keep the records safe and secure.
- Standardization the accounts payable process: Standardizing the accounts payable process is an important part of the accounts payable invoices. It is a good idea to have a standardized format for invoices that are sent. Regardless of the fact that all suppliers might send in different invoices, it can be seen that this is something that can be replicated as per format, so that it is easier to identify these respective changes. This format and layout can help organizations to manage their payment cycles in a more systematic manner.
- Reminders: Setting up reminders before payment due dates is also a good idea to organize accounts payable invoices. This can be done by keeping these invoices in a chronological order, so that there is clarity regarding the amounts that need to be settled. This can be an effective management tool for the company.
- Maintaining separate files for all major clients: Rather than combining all invoices in one place, it can be seen that they can be segregated into different clients. For major clients, separate accounts or files can be maintained in order to ensure that these records are available on hand when required. This organization can prove to be extremely helpful in case specific accounts need to be revisited during a process.
- Using Cover Sheets: Using Cover Sheets can be a good resource to summarize all the major decisions and factors within a contract or an invoice. Cover sheets are an excellent resource that can help accountants or managers to segregate invoices based on information entailed within these documents. This can be coupled with the reference numbers on the invoices to create a specialized list, which can be updated every subsequent week in order to keep a proper track of all invoices.
Therefore, it can be seen that accounts payable invoices can be managed if properly planned, and duly executed over the course of time. As a matter of fact, it is rudimentary to ensure that this is something that is carried out by the companies on a continual basis so that they can be on track with the required tasks that need to be undertaken to facilitate a better planning stage that can likely deliver the respective Key Performance Indicators.
In the same manner, it can also be seen that this organization is something that can be achieved with proper Standard Operating Procedures in place, in order for the accountants to have clarity regarding what they exactly need to do, to avoid any confusion. More than anything else, organizing accounts payable often lies on the grounds of ensuring that there are all the respective ground is properly covered in this aspect.
Invoice processing and following up with customers is a routine task for the accountants. Successful accounts receivable departments do it in an organized and controlled manner.
You will surely not want your business owners to look into invoices piling up and deciding on invoice factoring with outsiders. Working capital runs the business operations and invoicing cash inflows are the fuel of this engine. No business can afford to go for bank facilities due to a shortage of cash every time.
Effective invoice management can help you avoid the complexity and complications of customer relations and delayed payments.
A successful accounts department will essentially create a consistent, organized, and accurate invoice management system in place. As the businesses grow; invoice management becomes a tangling issue.
Here some effective tips that can help you organize your invoicing jumbles:
Automate The Invoicing System With Right Choice:
First thing first, choose an automated invoicing system that best suits your needs. All invoicing systems come with price and subscriptions.
This minimal upfront cost will save you tons of money in the future. It will make your life easy with automatic record-keeping, organizing, and analyses. Automation will offer you many benefits that come handy such as reminders, repeat invoicing, customization, etc.
Create a Customer Database:
In a growing business with a diversified set of customers, it will be a tedious task. Once you adapt to an online invoicing system, creating a customer database becomes easier.
This can help your business keep good relations with important customers, decide pricing strategies, and provide customized services. Prioritizing and follow up for invoicing also becomes easier with a customer database.
Follow Schedules And Avoid Procrastination:
Make invoicing schedules and set up a frequency that you can follow up. You’ll surely not want to be chasing up with customers all the time.
Once you make a proper schedule of invoicing, follow it rigorously, and avoid procrastination. Missed schedules and delayed invoicing will make things messy for your accounts department.
Offer Invoice Discounts:
It’s an inevitable phenomenon that all businesses face; you end up with invoice chasing and a bulk of them too.
Offer your customers discounts on invoicing for clearing up the balances. It sounds odd but it can help you reduce your pile of pending invoices quickly. Creating new invoices and record-keeping isn’t a monumental task, receiving payments against raised invoices is.
Charge Penalties for Delayed Invoice Payments:
Keeping good business relations with customers is a delicate job. Sometimes discounts and offers do not work with customers.
If your customers know they’ll be paying extra for delayed payment, they will likely avoid it in the first place. Make penalties for delayed payments part of your contract with customers.
Follow Business Terms:
Often business face the situation of conflict with customers and their invoice get stuck, sometimes never get paid.
To avoid such a smeared and awkward situation, always stick with your business terms. The process will be more effective when you follow the same business terms and procedures with invoice creation. This will create consistency and pave a way for clear communication with customers.
Use Consistent Invoice Codes And Ids:
This should be a straight forward task for large businesses using online or cloud-based automated invoicing systems. Small businesses should make sure to organize invoicing properly way with consistent invoice coding and customers IDs.
An ideal invoice should also include standard information including updated name, contact, product or service, and due date.
Effective invoice organizing starts with a good plan and accurate record keeping. Consistent and accurate invoice management can help shape a well-organized invoicing system. Effective and organized invoice management forms the basis of a successful account receivable system that can smoothly run the business operations.