Accounts Payables

Improve Accounts Payable Efficiency: 15 Best Practices

Posted on 30/06/2017

Every organization witnesses a skills gap; 75% CEOs feel their in-house team isn’t adept enough to keep up.Keeping that in mind, it is always helpful to define clear, precise and well-defined workflows and practices in every business process. Here are some tips and best practices to Improve Accounts Payable efficieny. A better Procure to Pay process will not only benefit your working capital, cash flow, and vendor relationships but go the extra mile help you to identify areas of savings and compliance. If you’re looking to strengthen your bottom line performance, what better way than to improve liquidity?

Services for Accounts Payable

So read on, as we enlist 15 best practices to improve accounts payable efficiency (in no particular order), keeping in mind the organizations where the AP function primarily relies on paperwork submissions. We know some companies have already adopted EDI and we’re going to keep this as generic as possible.

  1. Defined Roles and Responsibilities: Assign access rights, or assign specific employees the capacity to add/delete/modify vendors in the vendor master files. Especially in systems that lack the ability to print changes made to the files, this practice can be pivotal in avoiding theft.
  2. Use default settings to your advantage: It is recommended that you default the AP master file configuration to a Vendor Type used most frequently. If your system allows for multiple vendor categories, set access rights in a way that users only above a certain security level are allowed to change the GL code.
  3. Avoid batch entries: Entering each invoice individually, allows for a separate audit trail and that would greatly help in keeping track.
  4. Check the Invoice Dates: Do not let your AP clerks use older invoice dates. Try and understand how your system assigns GL month/year as well. When you generate reports on financial reports for a time period, correct dates will alleviate unexpected results.
  5. Review and reconcile: Compare charges to purchase orders while paying out and perform a monthly reconciliation.
  6. Automation is better: Manual processes such as expense reporting, data entry should be automated for better utilization of your accounting resources. This will also minimize risks and errors.
  7. Try an ERP system: Most of the auditor’s time is consumed in reviewing manual postings owing to an elevated risk factor. This can be eased with the help of an ERP system.
  8. Always compare with original: It is advisable to try and pay against the original invoice but if paying from a copy, compare the invoice number and charges indicated.
  9. Verify W-9: In the year’s end when you organize 1099s, you don’t want to be stuck in a rut. Before initiating payment, verify the vendor has a W-9 file for them.
  10. Invoice number rules: If all your clerks starting entering invoice numbers in the format they please, you’ll be lost for eons; especially if you don’t have an invoice number in hand. Instead, have a policy and educate your clerks on how to enter invoice numbers.
  11. Accountability: Assign and authorize separate people for entering the invoice, approving the invoice and signing the check.
  12. Logging is key: All invoices should compulsorily be addressed to the Accounts Department – this way they can be logged.
  13. Define Budget: It is safer to know your AP team know what the declared budget is, if you are among those who run a lot of cash transactions.
  14. Audit trail is imperative: Even if you don’t plan on paying the entire invoice amount, it would help the audit trail to mark it as billed. At these instances, use credit memos.
  15. Free is good: Discounts and free goods being offered by your vendors is something that could greatly help your accounts. Watch out for these festive promotions and make the best use of them.

Go the extra mile with these best practices, and watch your AP process go above and beyond maintaining operating margins. Velan is a trusted and seasoned Accounts Payable services providers. Velan AP process takes extra care on available free credits, payable days, purchase order mandates, and Accounts Payable cycle efficiency. Accurate Accounts Payable reconciliation plays a vital role in clearing unpaid bills within the stipulated time. Outsourcing your Accounts Payable management to Velan will help you effectively mitigate fines for late bill payments and ensure that you have a streamlined Accounts Payable process flow leading to optimized of profit for your business. Call Joyce @ +1-516-717-2049 to know more.

Topics: Accounting , Accounting firms , Accounts Payables , Financial Reporting , Outsourcing Accounting


7 Questions You Must Ask Before Purchasing Accounting Software

Posted on 02/03/2017

Accounting software these days is considered as a must-have to meet the requirements of small business mainly. Plus, it also acts as a vital tool facilitating your decision making process since you get regular updates of your finances and there are tools to analyze your budget. Not only do they provide you with all the details you require but also most importantly, they provide the same on-the-go. But the question is in a sea of accounting software available online, how you can choose the right accounting software suitable for your business.

Accounting firms - Velan

Below are some of the questions you must ask the service provider before signing up for the product.

1. Can the software meet all your requirements?

First of all, you must be clear and precise in what you want in your accounting software; second of all, you must know what you don’t want your software to do. This self-understanding will put you on the right perspective in deciding your vendor.

To understand your requirements better you can start asking questions like:

  • What are the features that I need? For example, payroll processing, bookkeeping, invoicing, customer information, inventory, etc.
  • Is the software scalable based on your requirements?
  • What would work for you? Cloud based online setup or local?
  • Is this software compatible with your computer and other software in use?

2. What is the potential of the software for ROI?

Once you have fixed the functionalities you require, the next thing you should do is think about the pricing of the product. You would like to have accounting software only reduce some of your operational costs and not hinder them. Plus, you should also ensure that you don’t spend much on this so-called solution for your problem. One main thing you should understand besides your requirements is what is the most you can spend on this software.

Bear in mind, you are looking for functionality and not how slick this application is. The application must be two things

  • Serve the purpose and cost and
  • User-friendly

3. What do the reviews say about this software?

Today, the rate at which information reaches many people is very high. Thanks to the technological advances. Online forums and social media play a vital role in delivering information to the needy people. Online forums do talk about products and their reviews. These forms are straightforward and it is where the credibility of the product or software lies. It is imperative to know what these customer reviews and other third party websites tell about the software you are planning to purchase.

There are third parties who would examine the product and give an unbiased review.

4. How does their customer support work?

Technological failure is unavoidable. But what if this failure, for instance – account inaccessibility, or a software malfunction occurs at an inopportune moment? What you can do is, find out the customer support services they provide. Some of the things you may consider knowing are:

  • Support included: you need to inquire what kind of services are covered. Some companies charge you for providing one-on-one support or for providing 24/7 support.
  • Expertise: a problem can be identified by experts who have comprehensive knowledge in the field. How quickly they resolve becomes imperative when you are dealing with a customer on live.
  • Forums: do they maintain any forums where any frequently occurring problems are discussed by other users. This will give you some knowledge on resolving the issues without the help of the support team.

5. Is the software customizable to cater your needs?

Before purchasing software, you must ensure if they provide customizable solutions. We all know, requirements keep changing and if you do need some customizations, you cannot pay more than one-third of the total price of the software. Negotiations are inevitable. Make sure that both the parties are benefiting out of the deal. Sometimes it is good to talk to the top managers rather than go through gate keepers who will drag their feet most of the times.

6. How secure is your data?

Most software is available online. Though the online availability of all your records may sound fancy, remember it comes with a price. The major price you would have to pay for this convenience is compromising your data security. Even a minor breach in data can cause a major threat to the small business owners. This may come in terms of theft of credit card details and customer details, and other vital information.

One way to be alert is to read the customer review about the software’s security, find out if there are any complaints on data breach, and finally check the company security policies to know if there are any vulnerabilities.

7. Is migration of your data and customer’s data possible?

Anybody can have the necessity to upgrade their older computer or for some reason change their system. The last thing you would want to deal with is the unavailability of data migration option. Truly, it is time-consuming to enter all the data all over again. Hence, data migration is one of the important aspects you will have to make sure that it is available in the software you would like to purchase. Plus, there are vendors who can lend you a hand with migration. This will come in handy when you don’t have time for data migration.

It is imperative to look for vendors who provide you all the above said things and at competitive prices.

Call Joyce @ +1-516-717-2049 to know more about the best fit for your business and also to handle your accounting needs.

Topics: Accounting , Accounts Payables


Top 5 Practices For Account Reconciliation

Posted on 13/02/2017

Account Reconciliation is very important for CPAs and accounting firms. If they are not handled effectively, they can be time consuming and exhaustive.  Below are some of the practices for you to handle account reconciliation in a whole new perspective:

Account Reconciliation

  1. Prioritizing the Balance Sheet

Strategically planning your priority is the key approach. This method is also called “risk based prioritizing.” You need to identify the accounts that have high chances of becoming erroneous essentially. This can be done by ranking the risks as high, medium, and low. Ensure that risks that are ranked high should be given more importance. You can also set times for each category. For example, you can set time frames like monthly, bimonthly, quarterly, etc to process the accounts. You need to thoroughly analyze the accounts both qualitatively and quantitatively to categorize each account.

  1. Standardization

You need to identify one “Best Practice” and ensure that you communicate the same to all the departments of the organization and everyone follows it as told. For instance, a company has to standardize the accounts reconciliation process, policies, templates, etc across the whole organization.

  1. Monitoring the process

Every member of a team should stay updated with the process going on. This may not work as desired if the team does not have a leader. When we talk about leading a team, it doesn’t mean that this leader should be from management; any person at a lower grade who has the flair to run the show will work. All he has to do is ensure that all the team members finish the tasks on time, follow up with late or unfinished reconciliations.

  1. Utilizing technology effectively

Technology these days is playing a vital role in the reconciliation process. Use the software from companies like Trintech, Hyperion, and BlackLine. These companies have designed software which has made the accounts reconciliation process much easier. Some important features of the software include automated balance interfaces, automated notifications for the users, real-time dashboards, etc.

  1. Improvements driven by metrics

The leadership in monitoring the processes can also take care of the performance enhancement and improvement by utilizing the metrics available. There are certain metrics that should be reviewed at regular intervals like a person’s or department’s completeness, material reconciling items, and overdue reconciliations. This can also help enhance the above mentioned standardization process.

Contact Joyce @ +1-516-717-2049 to know more about reconciliation and handle any of your accounting activities.

Topics: Accounting , Accounts Payables , Accounts Receivables , Outsourcing Accounting


What Do You Gain From Outsourcing Your Procure To Pay Processes?

Posted on 02/02/2017

One of the most popular and favorite segment that is Outsourcing Your Procure To Pay Processes or Accounts Payable processes. It’s pretty simple, why companies do that- P2P processes are completely a transnational one, hence most of the companies would like to free up the time and resources engaged in the P2P process and engage them more in strategic planning for their growth and development. Not only do the companies benefit from the labor arbitrage but also the accessibility to technology, reduced costs, and improved controls.

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In the below section we can go through each benefit extensively:

Data digitization & indexing

The need for paper based records have gone down exponentially. Yet there are firms that still operate based on the paper records. BPO companies help you in not just going paperless, but also gain access to your records easily and if you and the BPO have any time difference, you may also have the availability of the records all day every day. BPO companies will extract and index the information of the P2P process and make it available to you.

 

Improved control

When companies decide to outsource there’s this doubt that every business owner gets at some point in time. Companies are usually skeptical about how they can access their data and check how the service provider performs. Firstly, it is totally up to you to decide the processes to be outsourced. Secondly, BPO companies today employ the advanced technology available to maintain all the operations online. In case something is amiss, the parent company can always raise the issue with the concerned managers. This lets them have complete control over the processes outsourced.

 

Leverage labor and technology

A good BPO company will ensure that they employ professionals who are proficient in the given field. This gives the parent company a labor arbitrage. Not just employees, outsourcing companies also ensure that they are up-to-date with the latest technology and this gives the parent company to access all the technology available and stay ahead of their competitor companies. They have employees and technology in hand, which often happens to be the go-to point for the parent companies and the benefit the parent company reaps is enormous.

 

Increased operational efficiency

On one hand, most organizations involving P2P or Accounts Payable deal are the standardization and efficiency lack. On the other, there are these outsourcing companies who focus solely on increasing the operational efficiency of the clients by standardizing and continual improvement of their processes. They will observe your Accounts Payable metrics and revert to you with the report on Key Performance Indicator, which includes the accuracy of the job done, and the time of payments. With these data, you will be able to reduce the problems and exploit opportunities.

Note: It is sensible to outsource to companies that abide by any quality standards like ISO just to ensure that you are delivered with quality work.

 

Concentrate on core competencies

Basically, when you outsource your Accounts Payable or Procure to Pay processes, you will have ample time to concentrate on your core competencies. The skilled professional, who were initially frittering away time doing some data processing work can devote their talent and time on their core competencies that can develop the business and ensure the growth of your organization.

 

Should you wish to outsource your Procure to Pay / Accounts Payable processes with the above said qualities, visit www.velan-bookkeeping.com or contact Joyce at +1-516-717-2049.

Topics: Accounts Payables


Managing Your Payables And Receivables

Posted on 05/10/2016

Are you having troubles managing your payables and receivables? We have been there done that! As you know, managing your payables and receivables is the most significant aspect of your business in all stages. You may get overwhelmed with the kind of cash you’d have to handle, and keep everything intact and going. Fret not, below are some really simple techniques you can adopt to disentangle yourself from all the payables & receivables hassles.

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Payables:

Managing your payables can be a tricky business. For one, pay all your bills; do not let your unpaid bills linger any longer. The more prompt you are in your payments, the more reliable you become to your suppliers and lenders. Plus, there’s nothing like an unpaid bill that’s a dire threat to the business.

You can take complete advantage of the credit time limit given to you. For example, if your bill is due in the next 20 days, you do not have to pay the bill ahead of your time; rather you can use the cash for something else and pay this bill when it is due.

One other imperative thing you must do is to choose your suppliers wisely. Watch out for the ones that can offer you flexible payment options or that the ones that give you good discounts to pay upfront.

Receivables:

Nobody would have any problem running a business if they get paid for their products/ services on time. But that’s the hitch. Not everyone is prompt in their payments. Yet, you can do several things to collect the receivables efficiently:

  • Invoice your customers promptly. Do not procrastinate in sending your invoices, as it is quite obvious that your payment will be procrastinated too.
  • Do not give credit limits to your customers unless they are trustworthy. Enable COD (cash on delivery) for the customers; this will wipe out the painstaking process of following up for payments.
  • Offer lucrative discounts for the customers who are regular with payments. This will also give them a chance to make the payment then and there.
  • You must entail your customers to pay a deposit amount to use a product/ service if the invoice amount is huge.

Managing your payables and receivables can be easier if you outsource this to somebody who is experienced at the same time cost effective; on outsourcing to reliable hands, you can make use of the opportunity to concentrate on better things like working towards expanding your organization. Contact Joyce at +1-516-717-2049 to seek more information on Account Payables and Receivables.

Topics: Accounts Payables , Accounts Receivables