Accounts payable (AP) management is a critical component of accounting work, especially in the real estate sector, where it comprises about half of all accounting tasks. Keeping vendors paid is essential for the smooth operation of properties, but it shouldn't consume the majority of your team's time.
Outsourcing AP tasks is common in the industry, but this often involves giving up control of your AP inbox. It's time to rethink that practice and consider the benefits of maintaining control over your AP inbox, even when outsourcing invoice processing or data entry.
One of the primary reasons to retain control over your AP inbox is to ensure the safety and integrity of your data. When you outsource AP functions and allow a third party to manage your inbox, you risk exposing sensitive financial information to external entities. By maintaining control, you can implement stringent security measures to protect confidential data, monitor access, and prevent unauthorized changes.
Moreover, controlling your inbox allows you to ensure the accuracy and consistency of the data being processed. You can verify that invoices are genuine and correct before they enter your accounting system, reducing the risk of errors and fraudulent activities.
Maintaining control over your AP inbox means you are the first line of defense against potential data breaches and inaccuracies.
Another significant advantage of keeping control of your AP inbox is immediate visibility into incoming invoices and vendor communications. When you have direct access to your inbox, you can quickly review and assess what is coming in, allowing you to prioritize and address urgent matters promptly.
This real-time visibility ensures that no critical invoices or communications are missed, enabling you to maintain strong vendor relationships and avoid late payments or penalties. You can implement auto-forwarding rules that route invoices to the appropriate teams, and create instant visibility for other stakeholders.
Real-time visibility is essential for better cash flow management. By knowing what expenses are on the horizon, you can make informed decisions about your financial priorities and allocate resources more effectively.
Controlling your AP inbox provides a single, consistent process for vendors to follow, making it easier to manage and enforce. When vendors know exactly where to send their invoices and communications, it reduces confusion and ensures a more efficient workflow.
Outsourcing almost never handles 100% of your invoices. Sometimes because they are too complex, or because the information they contain is too sensitive. Having multiple processes for different vendors increases the risk of non-compliance.
A centralized inbox also simplifies tracking and managing vendor interactions, allowing you to maintain a clear audit trail and resolve disputes quickly.
By establishing a standardized process for vendor communication, you can set clear expectations and guidelines for invoice submission, payment terms, and issue resolution. This consistency helps build trust and reliability with your vendors, fostering stronger business relationships.
Maintaining control of your AP inbox allows you to leverage automation tools and forwarding rules that seamlessly integrate incoming invoices into your accounting system.
Automation can significantly reduce the manual workload associated with invoice data entry, freeing up your team to focus on higher-value tasks. By automatically forwarding invoices from your inbox to your AP system, you can streamline the entire process, reduce errors, and increase efficiency.
Furthermore, automation can enhance your AP workflow by enabling faster processing times, improving accuracy, and providing real-time insights into your financial operations. The ability to automate invoice processing is a significant advantage that is often lost when outsourcing companies take control of your inbox.
While outsourcing companies often request control over your AP inbox for convenience, it's essential to recognize that this arrangement primarily benefits them.
By managing your inbox, they can streamline their processes and potentially reduce their costs. However, this may not align with your business's best interests, especially when it comes to data security, visibility, and process control.
Owning your inbox also makes it easier for a third party to retain your business, even when you're not satisfied, because of the difficulty of transitioning out of their setup, and the risk of interrupting the flow of payments. Without the control over your incoming invoices, they have to work harder to retain your business, which will incentivize a higher level of service.
To further optimize your AP process, consider establishing separate entry points for invoices and vendor communication. Having a dedicated inbox for invoices ensures that they are prioritized and processed efficiently, while a separate channel for vendor communication allows you to manage inquiries, requests, and relationship-building activities more effectively.
This separation of entry points can lead to a more organized and efficient workflow, enabling your team to address specific tasks without unnecessary distractions or confusion. It also provides clarity for vendors, ensuring that their invoices and communications are directed to the appropriate channels.
Maintaining control over your AP inbox, even when outsourcing, offers numerous benefits, including data safety, immediate visibility, streamlined processes, and the ability to leverage automation. While outsourcing can be a valuable strategy for managing AP tasks, retaining control over your inbox ensures that your business remains agile, secure, and efficient.
By taking back your AP inbox, you can enjoy the best of both worlds: the advantages of outsourcing and the benefits of maintaining oversight and control.