Managing cash flow is critical to small business success. That includes monitoring accounts payable for the products and services your company needs to grow your operations.
Even with electronic accounting and financial software, small businesses spend a lot of time manually managing every invoice one by one. It’s a necessary task, but also one that’s susceptible to errors, missed details and lost time.
What is accounts payable, and how can your small business make it easier to track?
Accounts payable: What is it?
When a small business purchases equipment, services, or supplies from an outside vendor, they usually do so on credit. The total amount this business owes is called accounts payable. Bookkeeping records show accounts payable under “current liabilities.”
The accounts payable process
At most small businesses, the accounts payable process generally consists of three steps:
· The company issues a purchase order
· The vendor provides goods or services, generating a receiving receipt by the company
· The vendor issues an invoice outlining how much is owed and when payment is due
After invoice details have been reviewed and approved by the employee and the financial department, the amount is entered as accounts payable. Usually, the vendor gives the company a window of time — typically 30 or 60 days, or more — to remit payment.
Problems with handling accounts payable manually
The accounts payable process generates a lot of paperwork, whether it’s actual paper or digital. Even if purchase orders and invoicing are done electronically, handling them manually can result in a lot of gaps in the process.
Everyone in the business who buys an item or service must send their invoices to the officer in charge of accounts payable, meaning that the officer must sift through piles of emails to collect them all. The CFO then has to download each invoice manually, pay it before the due date, and prepare all the information for accounting.
The chances for error in this process are significant. Invoices can get lost in the email shuffle. Information can be recorded incorrectly or missed entirely. Paying invoices at several different times can make record-keeping hard to manage. The time spent in creating reports can add up to the point where the lengthy process becomes a liability in itself.
That’s why accounts payable automation is the 21st-century method of invoice management.
Monite: The Accounts Payable Process Made Simple
Monite is an end-to-end, automated answer for accounts payable processing. As part of its fully automated financial platform, Monite makes it easy to submit, review, approve and pay invoices in half the time.
Office team members send their invoices to the Monite platform. No matter what different formats they take — even if they’re scans of paper invoices — Monite accepts them all. Users can annotate their invoices with additional information.
Monite uses OCR technology to extract all the pertinent information on each invoice. It automatically organises all data and puts it in a clear, easy-to-understand report.
Send Regular Reports to Financial Officer
You or your company’s CFO receives a single report covering all the most recent reports, as little as once a week. They can review and approve all invoices in one sitting or return individual invoices for clarification.
With just one click, you can issue payments on all invoices automatically through your bank. Confirmation of payment is immediately sent to the employee who submitted the invoice.
Benefits of Accounts Payable Bookkeeping with Monite
Centralized Overview of All Activity
Monite gives you a complete look at your small business’s accounts payable activity in a clear, organised way.
No Lost Invoices
Monite’s automated system ensures that no invoice will slip through the cracks or get buried beneath a mountain of emails.
Your employees won’t have to bother you about payment because they’ll get a notification every time their open invoices are paid.
Most importantly, Monite automates all the organisational and clerical tasks that take up time that could be spent growing your business.