Outsourcing Accounts Payable: Services Provided by Specialized Companies

Outsourcing accounts payable (AP) is one of the easiest ways to gain more time for business growth. As a partner in a Chicago food business, managing accounts was always on my plate. However, with multiple responsibilities, the accounts payable function often fell through the cracks.

After searching for AP outsourcing service providers, we made a decision to work with Finsmart Accounting. They provided us with the specialized support we needed, and the list of services they offered was exactly what our team was seeking. Let's delve into the services they provide and explore the broader scope of work shared by other reputable service providers in the field.

Services Provided by Finsmart Accounting

Matching Invoices with Purchase Orders: Ensuring that each invoice is accurately aligned with the purchase order it pertains to. Processing Purchase Orders: Efficiently handling the receipt and processing of all purchase orders. Processing Debit Memos: Dealing with inbound debit memos to adjust account balances. Processing Standard Pricing Information: Maintaining accurate and up-to-date pricing data. Preparation and Processing of AR Aging Reports: Analyzing and reporting on the aging of accounts receivable. Processing Monthly AP Ledgers: Keeping detailed and current accounts payable ledgers. Processing Monthly Sales Tax: Calculating and remitting sales taxes as required.

By leveraging these services, our team could focus on other critical aspects of the business, allowing for greater efficiency and customer satisfaction.

Scope of Work from Other AP Outsourcing Providers

Receiving/Downloading Vendor Invoices: Managing the receipt and downloading of invoices from vendors. Validating Invoices Against Purchase Orders: Ensuring that invoices match the purchase orders accurately. Sharing Mismatched/Disputed Invoices: Handling and communicating with vendors about any discrepancies or disputed invoices. Issuing Matching Invoices for Approval: Generating invoices for approval based on the company's approval matrix. Following Up for Approvals: Continuously following up to ensure any outstanding approvals are received. Booking Duly Approved Invoices: Accurately booking all approved invoices in the AP system or books of accounts. Issuing AP Payment Lists: Creating payment lists in accordance with vendor credit periods. Liaising with Vendors: Communicating with vendors to resolve any queries or issues they may have.

This comprehensive range of services underscores the flexibility and adaptability of AP outsourcing providers, tailoring their offerings to meet the unique needs of each client.

Benefits of Outsourcing Accounts Payable

Outsourcing AP can bring numerous benefits to companies specialized in this area. These companies typically have large teams of accountants and AP specialists who are experienced in managing AP and the disbursement process. You can expect the following services:

Invoice and Payment Entry: Entering and processing all invoices and payments accurately. Allocating Invoices: Correctly matching invoices to the correct order or department. Multi-Way Matching: Ensuring accurate matching between purchase orders, invoices, and receipts or packing slips. Ageing Payables: Tracking and reporting on the aging of payables. Entering Credit and Debit Card Transactions: Processing all credit and debit card transactions efficiently. Processing Utility Bills: Entering and managing utility bills in the accounting system. Setting Up New Vendors: Adding new vendors to the database. Periodic Check-Run Processing: Running periodic check-runs to ensure all processes are working correctly. Processing Reimbursements: Handling the reimbursement of travel and entertainment expenses. AP Pay And Bill Outsourcing: Ensuring timely and accurate reconciliation of vendors.

These companies also ensure compliance with various statutory requirements, maintaining detailed records of vendors and subcontractors. This service includes coordinating with vendors and handling their queries.

Why Outsource Your AP Functions?

Outsourcing your accounts payable function can make sense for several reasons:

Overwhelmed Accounting and Finance Team: If your team is struggling to keep up with the workload. Increased Invoice Processing Costs: If the costs of processing invoices have become prohibitively high. Lack of Control Over the AP Process: If you feel you lack control over your AP processes. Vendor Relationships: If your vendor relationships are deteriorating due to efficiency issues. Cost-Effectiveness: If hiring an AP outsourcing provider is more cost-effective than adding more in-house staff.

Even if there are no pressing issues, outsourcing AP processes can still bring significant efficiency improvements. The right provider can enhance the overall functioning of your accounts payable processes, leading to improved accounting functions.

Good luck in your AP outsourcing journey!