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Is Accounts Payable An Afterthought? Five Reasons to Bring It To the Forefront

Discover five important reasons to bring accounts payable to the forefront and adopt automated accounts payable solutions to improve accuracy and efficiency.

Today business owners must focus on how to achieve global growth in an international digital marketplace. Due to the ease of accessibility provided by the Internet and the cloud, global growth is now crucial to remain competitive and relevant as the competition grows steadily. With a worldwide customer base, entrepreneurs must plan for the future as their companies expand into new territories.

As companies grow globally, the development of the accounts payable department may become an afterthought. The C-suite and the financial team should work together to ask crucial questions and get answers that are meaningful to the expansion of the business, including the role AP automation solutions can play. Consider these five smart reasons to bring AP to the forefront to be well-prepared for future growth through the adoption of automated accounts payable solutions.

Be Ready! Global Growth is Easier Than Ever

Since the advent of the Internet, growth beyond your home country into new regions of the world has become more accessible than ever before. People are less concerned with location and more focused on getting what they need at competitive prices with dedicated service. Savvy entrepreneurs harness the power of online resources to increase sales and reach vendors in different places to realize more significant savings and value.

All of these smart business-building and money-saving efforts lead to added activity for the AP department. As the team gets overloaded, payments might slow down as they attempt to keep up with the rapidly increasing pace of entry. And struggling to pay global suppliers can have a negative impact on business expansion. Implementing automated accounts payable solutions streamlines operations, reduces the need for human input and helps eliminate late payments. Relevant data is captured and digitized. Then the processes are completed touchlessly, so the AP team can focus on more mindful activities, such as looking for money-saving opportunities from vendors.

Establish and Maintain Solid Vendor Relationships

Establishing and maintaining solid vendor relationships that help support and sustain global growth is the foundation of a thriving business. Companies depend on their suppliers to provide quality, fair pricing, and dedicated service. Without the right vendors, a business cannot produce its products and services.

Positive vendor relationships can make it easier to develop and distribute quality products in an international marketplace. The accounts payable department plays a critical role in this process, from maintaining current and accurate vendor data to paying invoices promptly to ensure good relations. Entering data and invoices manually is time-consuming and leaves room for human error. Robust AP automation solutions provide the highest level of accuracy and processing invoices takes a fraction of the time.

Find Ways to Increase Cash Flow for Further Expansion

Further expansion is a continuing goal for forward-thinking corporations that are focused on developing a global customer base. Finding ways to increase the cash flow helps to fuel this expansion. Often the C-suite overlooks the accounts payable department as they consider ways to improve working capital - and this means a missed opportunity to increase cash flow.

With the implementation of automated accounts payable solutions, the AP team has more time for thoughtful projects that help the company save money and improve cash flow. Today the AP department has become a strategic partner with the C-suite by finding ways to save money and boost the bottom line. AP automation plays a critical role in this process by performing routine tasks touchlessly while the AP team explores money-saving opportunities such as paying invoices early (or late, for DPO reasons) and negotiating improved terms with international suppliers. Increased visibility is achieved through cloud-based automation that puts pertinent financial data within reach anytime and anywhere. Having instant access to this data gives the C-suite insights to increase cash flow.

Understand Tax Requirements From the Beginning

There are many considerations for businesses that expand globally. For example, tax requirements may change when conducting international commerce, which will have an impact on the AP department and the company’s bottom line. Failure to comply with applicable tax requirements can result in penalties, fines, loss of reputation, and the inability to conduct international business.

Collaboration is critical when a company expands into international territories. Cloud automated accounts payable solutions make it easy to maintain ongoing collaboration at any time and from any location. This is a noteworthy advantage for a company doing global business, with staff and stakeholders working at all different hours. Verification and approvals can be done instantly from any device rather than waiting for someone to arrive at the office. Templates for region-specific tax implications can be pre-coded to specific vendors or POs, making full compliance only a click or two away. 

Mitigate Foreign Exchange (FX) Volatility Exposure

Companies must designate the currency by which they will pay their vendors, and how organizations with multiple subsidiaries may open bank accounts in various jurisdictions to facilitate payments and manage internal cash flows. FX management opens a company up to the risk of errors. 

Being unfamiliar with local regulations exposes a company to the consequences of noncompliance. It is crucial for companies to develop robust automated accounts payable solutions to put financial data at the fingertips of the C-suite. Access to pertinent financial data in real time makes it easier for management to make sensitive international decisions related to cross-border payments

Failure to prepare the AP department can lead to loss of growth and the inability to effectively expand to other countries. Accounts payable is no longer an operational pain point with the implementation of AP automation solutions. The smart use of automated accounts payable solutions enables companies to allocate human capital to manually manage cross-border issues, such as supplier selection and saving money, rather than having the team handle routine tasks that can now be done automatically.

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