End-To-End Accounts Payable Process: Four Easy Steps to Follow

1. End-To-End Accounts Payable Process: Four Easy Steps to Follow

2. Introduction • Every business needs to manage its accounts payable (AP) to maintain its cash flow. • Most of the businesses fail to manage their AP because they do not follow the right procedure. • Businesses need to understand the end to end process of accounts payablethat helps them in managing their upcoming payable. • The accounts payable process includes four major steps that every business should follow for smooth functioning. • These steps include – invoice capture, invoice approval, payment authorizations, and payment execution. Read More:https://www.mixbit.com/accounts-payable-process/

3. Invoice Capture • Whenever you receive any invoice through email, regular mail, fax, or through the vendor’s website portal, you need to insert that into your accounting system first. • If you are following the manual process for data transfer, there are high chances of errors, and numbers might get manipulated. • The manual process can also slow down, depending on the complexity of reconciling invoices with PO (Purchase Orders). • It is advisable that you automate this process and ease your first step. Read More:https://www.mixbit.com/accounts-payable-process/

4. Invoice Approval • Once the invoice is received by the company, and inserted into its accounting system, it needs to be routed among the business department that utilized the vendor’s products or services. • To verify the delivery of the product or services mentioned in an invoice and to confirm the time it has arrived to sort out the payment issues. • You need to confirm the invoice information through multiple people before it arrives at the person who is going to sign off on the approval, and this might drag the invoice payment process to weeks. Read More:https://www.mixbit.com/accounts-payable-process/

5. Payment Authorization • When the accounts department approves the invoice after all the confirmations, it now needs to go to the finance team, and eventually the CFO or the controller who is going to authorize the payment needs to check and issue the final payment date. • This step can also extend the timeline if the authorized person is not available or they have limited access to their emails if traveling. • Automation allows businesses to decrease the manual process of inserting invoices into the accounting system. Read More:https://www.mixbit.com/accounts-payable-process/

6. Payment Execution • Once the payment is authorized, theinvoicewill travel to the person who will make the online bank payment or cut the check for the vendor. • If the due date is not clearly monitored, then there are high chances the company will miss the payment deadlines and lose out on early-bird discounts. • It is very important that the company follow their accounts payable process after monitoring the due date. • Manually managing all these four steps raises the chances of human errors, drag on resource time, limits the visibility of invoice payment, and limits control over short-term transactions. Read More:https://www.mixbit.com/accounts-payable-process/

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