As a business owner, you’re always going to have to pay bills. Employees, vendors, and consultants are just a few of the people that you’ll be sending money to for their services.
That’s just how it works. After all, the old adage goes, “You’ve got to spend money to make money”. But when you are spending money, there are some things you should keep in mind to streamline the process.
So, what are some accounts payable best practices?
In this article we’ll look at 5 useful tips you can apply to your business.
1. Keep It Simple
The less time it takes you to make payments, the better. While you have to manage accounts payable well, you don’t want it to take up half or a whole work day.
Things you can do to reduce the amount of time you spend paying people include:
- Limiting the number of monthly payments (once or twice at most; avoid weekly)
- Have backups ready and approved so they can be signed and distributed
- Delegate, delegate, delegate—as a business owner, if you can trust others to get this job done, you’ll be better off
As you grow your business, constantly be looking for ways to simplify the process.
2. Limit The Possibility Of Fraud
The truth is that you’re dealing with money and you need to protect yourself. And besides the legal ramifications, one of the best accounts payable tips you can apply is to cut out the possibility of having to figure out where your money went.
Whether it’s a team of employees or just a few that you trust, make sure those who have access to internal controls know what they’re doing and are recording their work.
3. Track Invoice Disputes and Refunds
Another disruption you might face with accounts payable are disputes and refunds. Have your team keep track of all these, possibly even printing copies of them in case they come back up in the future.
Regardless, keep backups of files documenting all refunds and disputed charges. This way if it comes back in the future you can solve the problem in minutes instead of spending hours looking for the information.
4. Use Technology
It’s 2020, so by now, you’re probably using some type of technology to help with accounts payable. If not, you probably should be (depending on the size of your business).
There are plenty of low-cost apps and software out there that make payroll much easier. Here are some examples:
And if you’re using QuickBooks, be sure to use technology that integrates with it. There are plenty of options.
5. Learn From Mistakes
When it comes to how to manage accounts payable effectively, perhaps the most important thing to understand is that not any one situation is the same.
Therefore, it’s your job (and your team’s job) to learn from mistakes as you go, refine your processes within HR, and not let one problem continue to disrupt your workflow. Do that, and you’ll be above many other businesses.
Accounts Payable Best Practices: Wrap Up
Paying bills is inevitable, but you can streamline your process by adding any of the tips above. Above all, be open to learning new things, integrate technology into the process, and protect your business assets.
Use these accounts payable best practices to uplevel your business in 2020 and beyond. Good luck!