10 tips for maximizing accounts payable

June 05, 2023
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Whether your accounts payable (AP) department is one employee who wears many hats or a sizeable team in a large company, it’s easy to view the AP process as clunky and repetitive; one that must be carried out to keep the administrative wheels turning. But what if accounts payable could be optimized to better manage time, improve supplier relationships and cash flow, reduce fraud, and even empower employees and get you back to the business of running a business? By combining best practices and technology, you and your team can make accounts payable work for you. Read on for 10 tips to help you make the most of accounts payable.

Analyze the current workflow and look for opportunities to improve. Your accounts payable module should be set up so that transactions flow properly. Identify workflow gaps or factors that are affecting the effectiveness of your existing processes. By understanding and clearly defining productivity challenges, you’ll be better able to recognize solutions.

Make the most of technology, as it’s the best way to reduce — and detect — human error and streamline a multistep or complicated process. From productivity tools (think remote check scanners like UBT’s Desktop Teller) to customer relationship management (CRM) software and everything in between, there are countless ways that businesses can incorporate tech into their AP operations. More of them are outlined in the steps below.

Simplify payroll with automated clearing house (ACH) payments. Rather than writing and distributing or mailing paychecks, consider using a direct deposit method such as ACH payments to simplify payroll. Doing so eliminates clearing time, reduces the margin of error, and frees up you or your staff for higher-payoff activities. ACH can also be used to pay vendors, collect payments, and consolidate funds.

Go paperless by leveraging online bill payment to pay your bills. It’s good to have options in addition to ACH payment, especially if you work with a variety of vendors and companies, or if more than one person handles payment. Using an online payment feature such as UBT’s Business BillPay lets you quickly and conveniently pay anyone online, receive and pay e-bills online (think utilities), and electronically link invoice and credit memo information with your payments.

Don’t be afraid of wire transfers as another safe and expeditious advantage to paper checks — and sometimes, the only option you have when transacting with a specific vendor. Partner with a trusted representative at a bank where you’re able to check the progress of your wire transfer using Business Banking Online or a business mobile app.

Use a commercial credit card to control your business expenditures and earn points with every purchase. You can also empower employees to make purchasing decisions while easily managing employee spending with a customizable commercial credit card. For example, UBT offers Visa® commercial cards that allow you to customize merchant codes and spending limits for each employee and assign unique, independent controls per cardholder.

Utilize reliable fraud protection with a cash management service like Positive Pay. A second set of eyes on both receipts and accounts payable is a boon to both cash flow and time management. Each day, you’ll be aware of any issues like altered or fraudulent checks, which can save you big in research time and check fraud losses.

Check for errors like duplicate check numbers and amounts. An efficient way to do this is to use that same type of cash management service like Positive Pay. By comparing your issued checks and ACH payments against those presented for daily payment and reporting any discrepancies to you, a reliable CM service can help avoid disruption of payments to your vendors or customers.

Improve cash management by setting up an account and/or credit sweep. With the sweep services account feature, our service “sweeps” the account for funds exceeding your pre-determined target amount and ensures that the extra money is invested* or used to pay down debt. And if you need additional funds for disbursements, funds will be automatically advanced from your credit line.

Bring in an expert for a fresh set of eyes on your business. An experienced advisor can help implement solutions to help your business make the most of its resources. Whether you bring in a paid consultant or request advice from your institution’s business banking expert, it’s important to ensure they have a clear grasp of your company’s financial picture and share your vision for success.

How can UBT’s experts help? Before we recommend any products or services, a Treasury Management expert will ask questions and take the time to listen to your needs and goals. Then we’ll offer the right mix of services to get you there, backed by service you’ll only get from a family-owned bank. Reach out to our Treasury Management team to get started and see how we can work for you.

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Learning Center articles, guides, blogs, podcasts, and videos are for informational purposes only and are not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.

*Investment products: Not FDIC Insured — No Bank Guarantee — May Lose Value.