Accounts payable is an annoyance at best, a disaster at worst. More and more businesses use accounts payable outsourcing as a solution to this problem. AP service providers employ best practices at scale to save cash and avoid errors.
What to look for in an accounts payable company.
When shopping for AP service providers, look for these 4 qualities:
- Knowledgeable of fraud and controls
- Uses AP automation
- Keeps you involved in the process
Knowledgeable of fraud and controls
The most expensive AP mistake is ignoring the importance of fraud controls. AP is the number one source of fraud in small businesses – ignoring that risk leaves you susceptible for hundreds of thousands of dollars in losses.
Fraud risk is addressed through two best practices:
- Implement proper controls, segregation of duties, and process audits.
- Educate your team about fraud schemes.
When interviewing accounts payable companies, ask them these questions to gauge how thoroughly they address fraud risk:
- How frequently are your bookkeepers educated about fraud schemes?
- What segregation of duties will exist to prevent fraud?
- How will you audit bookkeepers to ensure compliance with controls?
- What processes will always require management approval?
- What do I need to do to prevent fraud in AP?
Uses AP automation
AI and automation have greatly improved the AP process in the past 10 years. Today, software automation is the only way to streamline internal processes for AP. Paperless AP is best practice, and any firm using manual processes will be overly expensive and prone to errors. Accounts payable outsourcing should include setting your business up with an automated solution.
Keeps you involved in the process
Most executives wish to completely forget about AP, but managers must remain involved in payables process at least 10-15 minutes per week. This ensures you remain in-control with clear visibility into who’s getting paid. You should expect to:
- Approve vendor invoices over a specified dollar threshold
- Authorize payment cycles consistent with the business’ cash position
- Approve new all vendors
Entering vendor invoices is a non-value-add activity, so you need to minimize the cost of the activity. This is best done by avoiding errors, using automation, and working hard. The best accounts payable outsourcing companies use near-shore labor in countries like Mexico to save labor costs while maintaining quality.
Outsource AP to CFOshare
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.