Is Accounts Payable Outsourcing Right for Your Business?

By establishing clear expectations and maintaining a strong working relationship with the outsourcing provider, businesses can maintain appropriate control over their accounts payable processes. Skilled outsourcing providers can make a company’s AP processes more efficient; thus improving the cash flow. For many firms, the AP personnel tasks are not always as integrated into the business as another function such as operations, so it can be an attractive offering to outsource some of the paperwork. Of course, there are some downsides to using third-party accounts payable outsourcing services. Automation offers all these outcomes without sacrificing the security or visibility of your AP process. A good AP service provider should offer a comprehensive range of services.

1. But it involves incurring other costs such as investing in the software and allocating time for training the employees to use the software.
2. With a third-party provider, you will have to play by their terms and timings.
3. Before your business decides to use a third-party accounts payable outsourcing provider, compare the potential savings and increased privacy of AP automation software today.
4. Outsourcing is often favored by businesses looking for a hands-off approach and access to external expertise, while automation is preferred by those wishing to maintain control in-house with improved efficiency.
5. Here are a few scenarios in which outsourcing might make more sense than automating in-house.

Time Doctor is a powerful performance tracking software used by PWC and KPMG to track their outsourced teams’ work activity. Take the time and effort to communicate all changes to your employees — while this may take some time, it’s going to result in smoother processes, which will pay off in the long run. Outsourcing is likely to introduce modern AP software as well as collaboration tools to boost your efficiency. Your in-house team will probably need time to familiarize themselves with the same.

What does the accounts payable process involve?

According to research, the global accounts payable automation market is set to reach USD 1,567 million by 2025. This includes the adoption by every industry, including SMEs and MSMEs. See how forward-thinking finance teams are future-proofing their organizations through AP automation. To see how automation can improve your business outcomes with a scalable solution, request a demo of Order.co.

The comprehensive guide to accounts payable outsourcing

When a business decides to outsource its AP, a third party manages the AP department. Third-party accounts payable outsourcing services will typically use their own AP automation software to achieve efficiency. Third-party AP service providers offer professional teams and the latest software to do the job. When you outsource AP tasks to them, you gain access to excellent tools such as computer systems complete with customized invoicing, expense management, and other accounting software. By carefully considering the cost and value of different accounts payable service providers, you can make an informed decision that will deliver the role and responsibilities of the managerial accountant the best return on investment for your business.

The Pros and Cons of Accounts Payable Outsourcing

This is especially prevalent when businesses experience periods of rapid growth, which is often accompanied by an increase in invoice volume. While this is great for sales, it also puts additional pressure on your AP staff. This is especially the case for paper-based processes and those manually entering data, chasing down approvals, and heavy PO-based processes. Every additional invoice adds further load and over time, dampens AP productivity.

The drawbacks of outsourcing accounts payable

Efficient payment processing is another key service provided by accounts payable outsourcing companies. By ensuring timely and accurate payments to your vendors, your organization can benefit from improved cash flow management and reduced invoice processing costs. Prompt payment also helps to strengthen vendor relationships, leading to better terms and increased discounts.

Here are a few scenarios in which outsourcing might make more sense than automating in-house. But with the right automation solution, switching to automation isn’t a headache at all. Each advantage on that list is actually a benefit of automation, not outsourcing in and of itself. It memorizes even more than a human when it comes to features like tax compliance and global regulatory rules.