Accounts Payable also referred to as AP, refers to a business department or branch responsible for making payments owed by the company to other small suppliers and creditors. When a business decides to hand over this Accounts Payable process to a third party, it is known as Accounts Payable Outsourcing.
Finsmart, as an AP outsourcing company in India, works as your onsite/virtual team transforms your accounts payable function into an efficient automated process. Besides, vendor queries and communications are handled on your behalf, which truly frees you up from day-to-day liaising and coordination tasks.
Finsmart solutions have a team of experienced accountants who work under the guidance of qualified Chartered Accountants. This helps us manage your complete day-to-day accounting functions On-site or Remote under our outsourcing accounting and bookkeeping services model.
Additionally, we have worked on the accounts receivable project and helped our clients manage the receivables in books of accounts, and contributed to the clearance of the outstanding.
Our team effort has helped us become one of the top accounts payable outsourcing companies in India.
Outsourcing the accounts payable solutions doesn’t only mean transferring responsibility but it is also about deciding to work with a third party that helps in providing value to your business.
It also helps in improving your accounts payable process. The most common benefits of outsourcing accounts payable includes:
Having or hiring your in-house accounts payable staff and all the software or programs they require can sum up to a large amount, i.e. it can be costly for a company. Having the services handed over to a third party can result in having experienced and well-equipped accounting professionals to do the same job but at a comparatively lower cost.
On the other hand, you will also reduce the transactional cost for AP processing because outsourcing might pay by the number of invoices instead of by the hour.
Most accounts payable outsource providers use complete automated processes combined with their years of experience in the accounting field. Additionally, all your invoice copies and statements are processed quickly. That’s what their expertise is in, and this is what their core services are.
In short, the company you outsource this work of Accounts Payable can do this task in very little time, efficiently, and in a standardized way, reducing the normal paperwork that the in-house accountants do.
Humans making errors can lead to costly consequences for the company. The common mistake made by many companies is that they use spreadsheets to track accounts payable, there is much possibility that errors are already present in the process.
However, when the AP Process is outsourced, the companies use automated processes to make fewer or no common errors in the process.
An in-house AP department would require hiring a supervisor who will look after the handling and scheduling issues in the absence of the employees.
An outsourcing firm has cross-trained employees working on accounts and maintaining common standards. So you can be completely hassle-free about anything not being covered.
For a small and medium-sized business, having a timely and proper cash flow is important due to limited cash resources. Having a proper timely AP processed helps in the company’s appropriate working and saves small businesses from incurring huge losses.
The outsourced AP company helps pay the outstanding dues in time, thus also helping maintain a healthy relationship with the vendor or supplier.
At Finsmart, we use advanced workflow, industry best practices, and standard quality. We provide all our customers with minute-to-minute information on the process stage invoice, approvals exceptions, and the organization’s outstanding liabilities.
Our 24×7 customer facilitates proper response to vendor enquiries. We also maintain the maximum security of customer data.
The amounts that are due to the vendor for goods or services that are not yet paid for.
The total sum of all the outstanding amounts that are pending by the company to the vendors is known as accounts payable.
It is recorded in the balance sheet as Accounts payable under the Liabilities section.
Accounts receivable is the current asset account department that keeps track of the amount that is to be received from any third parties.
Again, these third parties can be banks, companies, or even people who borrowed money from you. One common example is the amount owed to you for goods sold or services your company provides to generate revenue.
The accounts payable are exactly the opposite of the accounts receivable, but you owe the money to third parties. The accounts payable comes under the asset section in the balance sheet.
The accounts payable department has a set of procedures to follow before making payments to the vendor. These guidelines are important because of the value and volume of transactions.
The process involves:
☛ Receiving the bill: If goods were purchased, the bill helps trace the quantity that is received.
☛ Review bill details: The accounts payable department ensures that the bill includes vendor name, authorization, date and verifies and matches the requirements to the purchase order.
☛ Updating records after bills are received: Ledger accounts are needed to be updated based on the received bills. The manager’s approval might be required at this stage with the approval hierarchy attached to the bill value.
☛ Making timely payment: All payments are processed before or at the due date on the bill, as agreed upon between a vendor and a purchasing company. Required documents are prepared and verified. Details entered on the cheque, vendor bank account details, payment vouchers, the original bill, and purchase order needs are scrutinized.
Accounts payable management is important for any business because it takes charge of clearing the entity bills on a timely basis, which helps maintain a strong and long-term credit relationship with the vendors.
When there is uninterrupted cash flow, then only the vendors provide an uninterrupted supply of goods and services.
Good AP process ensures that there are no overdue charges or late fees charged. Frauds and thefts can be avoided by following the standard accounts payable process.
You are just one click away from outsourcing accounts payable and receivable services; Fill the contact form or contact us on +91 98224 06432, and our experts will get in touch with you.