accounts payable

4 min

Accounts Payable Services: New Methods For A Digital Age

When it comes to Accounts Payable Services, size doesn't matter. When there are many small, one-time payments from different companies and clients, invoicing can become repetitive and inefficient. Let's see how automation and improved payment methods can simplify invoice processing and let you hold on to your money longer.

Glen Foster

Glen FOSTER • Libeo

Published on | Updated on

Accounts Payable Services: A New Way Of Doing Business

What is accounts payable with example?

In accounting, the term accounts payable (AP) is used to describe the amounts owed by a company to its suppliers, i.e. its supplier debts incurred after the purchase of goods and/or services. The account payable finances the company's cash flow: as long as it is not paid, the invoice constitutes a liquidity.

Accounts Payable Automation: a new way of processing supplier invoices

Paper is out; digital is in.

In the past, accounts payable departments relied on manual processes to handle supplier invoices. The process typically involved scanning documents into an electronic system or manually keying data from those documents into an application. Today, however, companies can automate this process by taking advantage of new methods for processing supplier invoices. These include electronic invoice submission and automated payment tracking. Hence the automated accounts payable system.

electronic invoice submission

Companies can use e-invoicing software to submit their invoices electronically. This allows them to bypass paper documents altogether and reduces costs by eliminating postage and printing expenses. In addition, e-invoicing allows businesses to track payments more easily than they could with paper invoices because the company keeps a digital record of each payment that it can access at any time via its accounting system or other software tool.

Automated payment tracking

Automated payment tracking (also referred to as AP automation) uses technology to help accountants manage their accounts payable processes more efficiently than they could with manual methods alone

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Uncovering The Benefits of Automated Accounts Payable Systems

Accounts payable automation is one of the most promising trends in business today. The idea is to use software and cloud technology to streamline the accounts payable process, making it more efficient and cost-effective. On top of getting a better handle on your cash flow and a better view of your vendor data, accounts payable process helps you collaborate with suppliers and hold on to your money longer.

The Benefits Of an automated accounts payable system

  1. Efficiency: You'll be able to receive invoices faster and send out purchase orders faster than ever before. This will help keep your team on schedule and ensure that nothing falls through the cracks when it comes to paying vendors.

  2. Accuracy: When everything is digital, there's less room for error — which means fewer late fees or other penalties for tardy payments! Plus, if something does go wrong with a payment, the issue is usually easily resolved because the invoice is right there in front of you on-screen.

  3. Flexibility: Automated accounts payable solutions are flexible enough to work with any type of business or industry including small businesses, corporations and government agencies alike since they can be customized according to each organization’s specific needs.

  4. Less paperwork - Paper invoices require scanning into the system after they've been approved by someone in accounting or finance. This means more work for employees who have to scan each invoice individually into the system before sending it out for payment processing. With an automated system, the entire process is dematerialized, from invoice collection to final payment.

  5. Faster Payments: With automated accounts payable systems, employees don’t have to spend as much time entering data into the system or sorting through piles of paperwork anymore because everything is done electronically. This allows them to focus on other tasks within their job description instead of spending valuable time doing something that can be automated with software or hardware solutions.

The Paperless Office: Accounts Payable in the Future?

The paperless office has been talked about for years. It's something we all want because it would save time and money. But what does this mean for accounts payable? How will it affect the way that vendors are paid?

What does the future hold for A/P processes?

The future of A/P processes will be heavily influenced by technology. As we've seen in other industries, the ability to automate mundane tasks can dramatically increase productivity and efficiency, while also lowering costs.

According to Deloitte's 2019 Global Human Capital Trends report, "The number of job openings has grown by an average of 12 percent per year over the past decade." This means that accounts payable jobs will be on demand and there will be even more pressure on companies to prepare smart accounts payable interview questions in order to fill these positions.

What does this mean for a paperless office? Well, it means that it's going to be even more important than ever before for businesses to transition away from paper documents and toward digital ones.

Many companies are already leveraging technology to automate their A/P processes. Some use automated invoicing software, which allows them to send invoices electronically, thereby eliminating the need for paper checks or payment stubs. Others have moved from paper checks to electronic payments via ACH transfers or wire transfers. And still others are working with third-party vendors that offer these services as part of an outsourced accounts payable service offering.

Cloud-Based Accounts Payable Systems: the perfect tool for small businesses

Cloud-based solutions have taken off in recent years due to their flexibility and ease of use.

Small businesses often struggle with keeping up with the latest trends and technology, but Cloud computing has made it possible for businesses of all sizes to access high-quality technology without having to invest in expensive hardware or software. Here are a few reasons why it's worth exploring:

  1. It's easy to set up and use

  2. You can access it anywhere

  3. It integrates with other systems

  4. Designed to be scalable, they adapt to the needs of organizations and grow with them.

If you're looking for new ways to improve your accounts payable process, consider using a cloud-based system like Xero and Libeo. These systems allow you to manage all aspects of your accounts payable process from one central location, so there's no need for multiple applications or complicated spreadsheets.

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FAQ

What is difference between accounts payable and accounts receivable?

Accounts payable (AP) is a list of short-term liabilities; AP is owed to suppliers for goods purchased, for example. On the other end, accounts receivable (AR) is a listing of funds the company expects to receive from customers and partners; AR is listed as a current asset on the balance sheet.

What is the journal entry for account payable?

When recording an account payable, debit the asset or expense account to which a purchase relates and credit the accounts payable account:

  • Purchase A / c: debit

  • To Accounts Payable A / c: Credit

When an account payable is paid, debit accounts payable and credit cash.

Where are accounts payable listed on a balance sheet?

Accounts payable is a liability. Therefore it is listed under “current liabilities” on a balance sheet.

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