“Well, I have a team of accounting experts looking after the finances, there is no need to rope in an external accounts payable services partner.”

“Our in-house administration department itself manages our vendor payments. We are not looking to invest upfront in accounting staff or outsource AP services.”

“Our vendors never complain about delays in the payments. They simply add up the outstanding and raise the invoices again.”

A strategic finance leader would never believe or stand something like this in their tenure.

Cash flow and vendor relationships both are of prime significance for a healthy business relationship. And a CFO who realizes this, never falters at making supplier payments on or before time.

You may start to think — “If so, then what calls the need for accounts payable services?”

Your business expansion and growth avenues hinge solely on the way you handle your cash flow, invoice management & vendor relationships.

An in-house team of AP experts handles the load, but may struggle to adapt with changing AP processes, evolving technological solutions, and changing vendor expectations.

Thus — accounts payable services.

Still uncertain?

When Should You Think Accounts Payable Outsourcing

Outsourcing accounts payable function is a crucial decision to make for any business leader, and it should be.

The decision outsource AP is not something you decide overnight.

There are signs you need to follow as a decision maker, before you decide whether to continue managing accounts payable in-house or extend your team by investing in accounts payable services.

You may start to think — “What are these signs and when is the right time to approach external help?”

Let us look at the scenarios indicative of the need to outsource accounts payable function.

Let’s figure out the answer for you.

Your AP team is overburdened with the workload

First, if your AP team is overwhelmed and burdened due to increasing workload, it’s a big positive.

You may wonder — “How does owing the payments to suppliers become a positive?”

Positive because, increase in supplies is a ripple effect of increase in the sales.

Leaving the positives aside, it’s commonly observed that the AP department often overworks to keep the supplier payments in time and maintain the vendor relationships.

And precisely, a decision to outsource AP can promise some relief.

Still, if you don’t wish to take that route, the burden may result in some unforeseen circumstances.

This burden often inclines during periods of rapid business expansion, where increased sales result in a flood of invoices. While the boost in revenue is fantastic, it inevitably burdens your accounts payable team.

This burden is particularly acute in environments relying on paper-based systems or manual data entry, where chasing approvals and managing heavy PO-based processes is mandatory.

Each additional invoice adds to the load, gradually derailing AP productivity. This results in unreasonable backlog, fading efficiency, and increasing risk of errors.

Outsourcing accounts payable services helps ease the burden on your AP team and streamline the function.

Thinking about — “How will outsourcing payables prove helpful?”

Simple. Outsourcing accounts payable function will free your in-house team from redundant overheads.

Your vendors will thank you for the timely release of payments, with improved workflows & processes that the outsourcing partner brings in.

Your invoice processing costs are shooting through the roof!

Did you know?

The cost of processing a single invoice manually varies somewhere between $15 to $40.

Your inefficient and complex workflows should take the blame for this.

Imagine the hamster-wheeling your in-house AP team must do to process one vendor payment.

They will have to handle the paper trails manually.

They will have to deal with vendors, who aren’t all cooperative.

They will have to communicate the differences, back and forth!

They will have to manually verify the invoices & seek departmental approvals.

And, at the end you will see the added-up costs for manual invoice processing.

Realize, that won’t be the right time to regret not outsourcing payables in time!

As a decision maker you must prioritize exploring all options for reducing those costs for invoice processing, including outsourced accounts payable services.

Your AP process lacks controls

Mistakes are bound to happen with manual invoice processing.

On average, approximately 0.1% to 0.05% of invoices paid are typically duplicate payments.

Duplicate payments are a serious concern and as a CTO, it’s of prime significance to you to get rid of these flaws in the payable accounts process.

This can even mean hundreds, thousands or even millions of dollars lost to duplicate payments, based on the size of the business.

And yet, you are not accounting for the time and energy your AP staff spends to recover the lost payments. This in turn affects the overall AP function of your business.

An Accounts payable services provider ensures they utilize the right set of tools & procedures to facilitate tighter control on your AP processes.

Your vendor relationships are suffering like never before!

Vendor relationships are not different from customer relationships, when cashflow is in the game.

Imagine losing vendor contracts due to a poor payment reputation. Repeated delayed payments are indicative of a red flag for vendor relationships.

94% of businesses experience a negative impact due to late payments!

From missed due dates or non-payments, your vendors will follow up with the accounts payable department to track down the status of their payment which again eats into everyone’s valuable time from accounts payable.

No matter the circumstance, when a vendor payment is missed, it shows badly on your company’s reputation. Vendors might sometimes resend the same invoice and through multiple mediums to ensure they are paid, which as mentioned in the previous listed issue, can result in double-paying an invoice.

Instead, you can allocate your budgets on outsourced accounts payable services than hiring more AP staff.

This has a strategic advantage over adding more resources, which includes hiring, training and retaining them. It demands spending longer time & extensive cost and energy resources — which most of the CFOs don’t have.

You would prefer to outsource AP services than hiring AP staff!

Hiring AP professionals on your in-house team doesn’t come easy.

Hiring is the hassle that leaders would prefer to stay away from.

Vetting for the right fit, conducting the one-on-one discussions, selecting the right candidate, and then hoping for the hire to stay with you forever.

Isn’t that too much to ask for?

Why not simply outsource AP services from a reputed services provider?

Going this route saves you from the hiring hassles & higher costs of recruitment too!

Plus, you get access to vetted accounts payable processes, advanced accounting tools, and top accounts payable talent.

So, when you hit rock bottom with the hiring hassles, outsourcing payables walks in as a savior.

Now, as you know when to approach an accounts payable services company, let’s look at the brighter side of working with one.

Integrative Systems — Your Accounts Payable Services Partner

In the broader landscape of financial operations, accounts payable service providers emerge as invaluable allies, quietly orchestrating the smooth functioning of financial processes.

Integrative Systems offers unparalleled accounts payable and receivable services, custom-tailored to your business needs. The accounts payable services portfolio includes but not limited to –

• Invoice processing and management
• Vendor management and communication
• Payment scheduling and execution
• Expense reporting and analysis
• Purchase order management
• Data entry and verification
• Reconciliation of accounts payable records
• Compliance and audit support
• Vendor payment dispute resolution
• Document management and storage

Our team of AP professionals ensures your bills are settled on time, your financial records are spot-on, and your business operations run like a well-oiled machine.

So, the next time you settle a bill or process an invoice, take a moment to appreciate the pivotal role that accounts payable services play in maintaining the smooth sailing of your business.

And if you’re looking for a reliable partner to manage your accounts payable and receivable, and become an extension of your in-house team, your search ends with Integrative Systems.

After all, a business without efficient accounts payable is akin to a ship without a compass — it will soon be adrift in the sea of financial chaos. With Integrative Systems at the wheel, you always steer toward financial success.

Drop us a line at contact@integrativesystems.com, and let’s start the conversation.