Accounts Payable Outsourcing vs AP Automation

accounts payable outsourcing

This means that you use the accounts payable services of an external entity to perform your business transactions. AP Automation, in comparison, is the adoption/integration of an AP software to extract, validate and approve accounts payable processes. There’s little doubt that accounts payable outsourcing and automation improve your organization through higher cost savings, better pricing, increased profitability, greater efficiency, and better data insights and tools.

The Account Payable platform is configured to manage exception workflow and assure that your vendors get paid on time. Relying on manual and time-consuming AP operations may result in errors and limited visibility, hindering the company’s potential for growth. These challenges can accumulate over time, creating more significant problems for the organization in the future. In contrast, outsourcing accounts payable presents a solution to address these challenges and positions the company to remain competitive and thrive in the dynamic business environment. Accounts payable outsourcing is a business strategy in which a company delegates the management and processing of its accounts payable (AP) functions to an external service provider. Accounts payable (AP) outsourcing involves delegating the management and processing of a company’s payables to a third-party service provider.

You benefit from having a qualified and trained Account Payable team on your assignment who will help you achieve your Account Payable department objectives. If you have a question or comment about our services, or you’d like an IQ BackOffice representative to contact you, please use the form below. If you have a question or comment about our Business Process Outsourcing services, or you’d like an IQ BackOffice representative to contact you, please use the form below. Stampli has various help system articles and an email form to reach customer support. Stampli offers month-to-month pricing (with no annual contract) but requires a consultation with their sales team for a price quote.

In many cases, outsourcing is the easiest way to eliminate paper invoices, checks, and receipts. Paper processing has long been one of the most significant sources of problems for accounts payable professionals, especially in terms of fraud. Mid-sized businesses don’t often have the luxury of employing a robust team of security experts, nor do they have the resources to run extensive audits and eliminate risks.

  • They help to set up bookkeeping, streamline payments to your vendors, and allow you to manage your employees’ spend via custom controls.
  • Handling accounts payable in-house can be overwhelming, especially for small businesses dealing with a high volume of daily invoices.
  • In case your business ends up sharing invoices that are duplicates you’re likely to end up paying double what you’re supposed to pay.

Professional AP teams have the training and knowledge necessary to complete these activities quickly and accurately, which leads to shorter turnaround times and fewer mistakes. Your Account Payable team members are trained in most of the commonly used Account Payable systems. They are all college educated with accounting degrees and you benefit from their experience in Accounts Payable. ranks Corpay One a 10/10 for its cloud security – noting good data protection and having a good security infrastructure in place. Corpay One also uses the highest level of data encryption for your bank information, utilizing Stripe for this.

Accounts payable outsourcing alternative: BILL

Invoice processing is a business function that involves managing incoming invoices from initial receipt to payment. It’s carried out by the accounts payable department and is a critical component of the procure-to-pay process as the final step of any procurement activity. Accounts payable service providers act on your behalf in front of your vendors/suppliers and build beneficial relationships.

accounts payable outsourcing

Melio provides you the ability to pay in any format you prefer based on your cash flow, and they will pay the vendor invoices in any method they prefer. There is always someone from team Papaya who is available to help with your outsource accounts payable. Papaya Global is another option if you need someone to handle your company’s accounts payable functions. Hiring, automation, or outsourcing is a choice businesses can make depending on their means, time, and capability to ensure smoother AP processes and better business efficiency.

Reducing Paper Invoices and Manual Data Entry

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. To do that, let’s look at the pros and cons of outsourcing versus automating your own AP and keeping it in-house. With a result-driven operational expertise, Auxis focuses on making your M&A vision a reality – people, process and technology. From synergy realization to system integration and organizational re-alignment, we focus on the heavy lifting required for success. Discover which benefits you can leverage as part of the M&A and carve-out process.

accounts payable outsourcing

Data Capture technologies of Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR) are utilized to read and extract data from vendor invoices. The ARDEM Invoice Manager platform is configured to provide Data output files via API transfers, Dashboards to view Spend Data and Reports with actionable data that can be used for Analysis. Your Account Payable process is set up so that every invoice that comes in is acted upon the same day. Exception Invoices requiring further action are tracked to ensure quick resolution.

Now we are Ready to Start Account Payable Processing for You

Outsourcing companies may not always be transparent in how they deal with your AP processes. Also, changes in your processes may not be fully implemented by outsourcing companies handling your AP processes, resulting in more errors or rework. Organizations dealing with sensitive financial data may be hesitant to use a third-party vendor for their AP processes. Before implementing a move to outsourcing or automation, get your data in order to ensure you begin your new program with a clean slate.

  • Of course, this rapid change in processes can cause problems in-house, especially if your employees are used to your old procedures.
  • This lets you determine if the provider matches your security standards before you outsource work.
  • To do that, let’s look at the pros and cons of outsourcing versus automating your own AP and keeping it in-house.

You may have hesitations about working with a third-party, or it may not be a reasonable choice in your industry. With an accounts payable solution like Volopay at your disposal neither will there be a need to outsource accounts payable nor will you have to struggle with the burden of managing accounts payable in-house. AP providers do take measures to ensure security breaches and information leaks do not happen you can never be too sure when you’re not tackling the problem yourself. Moreover, if your provider does not have duplicate detecting tools you might end up incurring a lot higher costs than necessary.

Invoice Exception Management

Each of those listed above is titled as “best” for a certain function, and if that is what you are looking for, it may be the right choice for you. The Beanworks customer service teams are broken into specific sections for any type of questions you may have. They also have robust FAQs and education sections on the site to help you understand their AP processes. Along with the ability to supercharge your AP automation, Papaya Global also offers onboarding, HRIS, payroll, compliance, and cross-border payment services. understanding tariffs is a handy solution for companies to make their AP processes efficient & cost-effective. While outsourcing your accounts payable may seem problem-free there are some issues that a business can still face with outsourcing.

Accounts payable outsourcing vs accounts payable automation

By running proper checks & validations, they can identify errors in invoices and prevent wrong payments. The use of AP experts and sophisticated technology helps them identify risks and reduce the incidence of fraud. According to Ardent Partners’ Accounts Payable Metrics that Matter in 2020, the top challenges holding AP back are exceptions, lengthy invoice approval times, and too much paper. Another big challenge is the amount of time staff spends on handling supplier inquiries.

Next to high processing costs, it is also a time-consuming and error-prone process. It can lead to late payments, incorrect payments, and other issues impacting a business’s financial health and reputation. CFOshare uses our professionally trained team of Mexican bookkeepers to reduce fraud risk, reduce error frequency, save cost, and empower you to focus on your core business. If you are ready to explore accounts payable outsourcing for your business, contact us now for a free consultation. One primary concern with outsourcing accounts payable is the need to share sensitive historical data and in-house documents with the external provider. While outsourcing accounts payable offers numerous benefits, there are also valid reasons why some companies may choose to avoid this option.

Outsource AP to CFOshare

The website includes an extensive FAQ section and support forum, as well as live chat and phone support to reach customer service outside of normal business hours. Book this 30-min live demo to make this the last time that you’ll ever have to manually key in data from invoices or receipts into ERP software. Businesses should remember that they lose privacy when they are divulging financial information and providing access to sensitive data while opting to outsource AP processes. Choosing a reputable third-party processor is an essential step in reaping the benefits of outsourcing your AP tasks.

If your company handles sensitive financial data and is hesitant to outsource a third-party team, implementing an AP automation solution to keep full control over the AP process may be the best option. To help you find the answer to this question, we will discuss the benefits and drawbacks of outsourcing your accounts payable processes as well as compare it to AP automation. These factors make businesses consider outsourcing accounts payable entirely, but this also has certain disadvantages. Therefore, companies are exploring alternative solutions such as automation to manage their accounts payable.

Your accounts payable process may be put at risk, and switching to another system can be expensive and time-consuming. An increasing number of businesses are outsourcing their accounts payable processes to a specialized third-party team. We’re transforming accounting by automating Accounts Payable and B2B Payments for mid-sized companies. Currently, proxy payments account for roughly 30% of our customers’ virtual card spend, so it’s a huge value-add in terms of maximizing your spend without any additional effort. Manual accounts payable processes have caused businesses challenges since long before remote working became the norm, prompting many organizations to embrace and invest in AP automation.

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