We are always looking for ways to improve our business. We want to eliminate inefficiencies and increase our profit margins.
Sometimes the answer is not as clear as we typically think. Many people think that their workers are not doing their best or that our new online work environment is holding them back. Companies, large and small, should take this time and rethink how they operate on a day-to-day scale. Specifically, the accounts payable department in businesses is tough to manage and can cause drag or confusion. We will be describing the best improvements and practices in your business that can benefit your company today.
Going Paperless
One of the ways accounts payable slows down your business is the heavy paper flow of your business. Having to wait for the mail to complete work often creates a lull in your company’s workflow. Paperwork can also be lost or damaged which creates too much confusion to deal with.
Electronic billing can eliminate the slow paperwork process that your business faces today. During the pandemic, businesses have been utilizing electronic invoices and accounting software to handle their accounts payable process. Invoices and purchase orders no longer get lost or damaged. As long as they are sorted correctly, finding and processing paperwork should be a breeze.
Giving your customers the option to choose an electronic option also allows you to monitor the process from your phone or computer. You can set up online payment plans to organize when you know your next payments are coming in and be instantly notified instead of waiting for the documents in the mail.
Creating An Organized Online Data Cabinet
Sometimes filing paperwork away in metal containers and then eventually cardboard boxes leads to confusion and disarray when a customer requests a specific document. After you receive any documentation regarding your billing, you should store it in an online archive that holds all financial documentation for all of your customers.
This organization allows you to accurately pay invoices and in a timely manner. You know exactly what has to be paid, who is paying, and what it is you are paying for. This high level of organization also allows you to quickly and accurately fill out your tax information. The tasks that seem to be a drag before no longer seem like a hassle.
Treat Your Customers Like Family
Oftentimes it seems like you are burdened with the idea of reaching out to customers to extract necessary information in order to do your job to the best of your ability. Start reaching out to customers when there is no bad news or issues. Create a relationship with them and establish a culture of trust between you and the vendors you work with. This can lead to better deals in the future, open honest communication, and grow your network. They are more likely to refer you to someone else if you are a pleasure to work with. Also, maintaining a constant dialogue with your customers allows your contact information to be as current as possible so there are no issues in communication when you need to contact them urgently.
Optimize Your Business Expenses
Businesses face major problems when they realize that they have spent more money in a month than they brought in. Creating a business budget explicitly lays out how much money you will be spending at certain times and will improve the end-to-end accounts payable process. You will be more aware of where you stand because you are more conscious of when and what you will be spending in a certain time period.
Your business can also look for discounts on the supplies, inventory, and services you need in order to spend your money in the right place. Obviously buying in bulk will open up discounts for your business, but make sure your company is turning over the inventory before you decide to buy in larger quantities.
Create an Emergency Fund
It would be nice if the business was always booming, but that is not always the case. When things are slow it is easy to fall behind on payments. Creating an emergency fund for extra cash during times of heavy cash flow can help your business maintain steady growth. Creating and contributing to your company’s savings account for emergencies will help you delegate money to payments when you appear to be short on cash. Just be sure to replenish your emergency account when you have the funds to do so.