Accounts Payable

Guardians of the Budget: Transforming Accounts Payable Into Revenue Heroes

March 1, 2022


Estimated Reading Time: 3 minutes

Wasting money is like kryptonite for running a successful business. Unfortunately, it is remarkably easy to do so in accounts payable. Duplicate payments, a sprawling list of suppliers, and poor data accuracy are just a few factors that can sap your money. The good news is, there are simple steps you can take to transform your AP team into revenue heroes and keep your company financially strong.

Hold the High Ground

One of the simplest ways to protect your budget through accounts payable is to limit your number of suppliers.

To establish a list of preferred companies, Deloitte suggests creating supplier performance scorecards. You can use these to your advantage when negotiating to help ensure the best terms possible. Items on the scorecard could include on-time delivery, defect rates, and quality of service. What’s more, a smaller number of vendors means you will also help your AP team save time, by reducing the number of contacts they need to manage.


Be Diligent with Data

After you’ve determined your vendors and established your relationship with them, it is important to enter and maintain data accuracy. Record discounts that suppliers may offer for bulk purchases, or for early payment, as well as potential rebates and trade credits. Keep an updated list of key contacts, so your team knows exactly who to speak with when looking into special pricing and new offers.

You’ll also want to enter all relevant information regarding your Service Level Agreements (SLA) with each company, noting things like quality standards and delivery timelines. Careful documentation and updates will help ensure that your suppliers meet the standards agreed upon, and will also keep you in an advantageous position if or when they are not met.

Set Expectations

Set the Standard

It is important to implement procurement guidelines. Among the initiatives to require are invoice and purchase order matching so that you can identify errors and avoid duplicate payments. It will also help ensure that the supplier’s bill is using the agreed-upon terms.

Without maintaining clear procurement standards, you risk overspending and putting yourself in a difficult position when it comes time for cash forecasting.

An automation solution is invaluable for this. The software helps match up invoice and purchase orders instantaneously.

Beanworks’ SmartCapture feature captures invoice data with 99% accuracy.

All of this will help prevent you from paying faulty invoices.

As a best practice, when you identify an invoice with errors — be they in price, quantities, or even information like an incorrect address — send the invoice back to the vendor. In addition to making sure that you only pay the agreed-upon price for the amount that you need, this will reset the clock on your invoice due date, keeping money in your bank account longer.

Ditch the Manual

Perhaps the best way to stop wasting money in accounts payable is to rid yourself of manual processes. Levvel Research has estimated that the average cost of manually processing an invoice is around £15. Compare that to the cost of processing an invoice with AP automation, and the cost drops to £5 or less.

Assuming a quantity of 500 invoices a month, and a savings of £13 per invoice, automation would create £78,000 in cost savings each year.

Automation also adds an added layer of protection against financial scams. According to the 2020 Report to the Nations published by the Association of Certified Fraud Examiners (ACFE), organizations lose as much as 5% of their annual revenue due to fraudulent activity.

To learn more about how to stop burning money, check out Beanworks’ free, on-demand webinar: Costly Accounting Practices Every Business Should Avoid.

Sign up Today

Stay up-to-date on top accounting and finance trends

Sign up for our newsletter and receive our latest resources, news and insights.

Learn More About Beanworks

Discover how AP automation can free your accounting team from manual data entry, delays, and paper-based processes.

View Our Product