Once your business has decided to start outsourcing non-revenue generating activities such as the Accounts Payable function, you then need to look for a supplier who will work with your system to seamlessly integrate the service. By virtue of the cost saving nature of accounts payable (AP) outsourcing there are now a ton of suppliers who provide the service. Nonetheless, how do you know if a supplier is right for you and what questions should you be asking before deciding?
What is the reason to outsource AP functions?
Before you start looking at accounts payable outsourcing companies, it’s imperative to understand why you want to outsource and what you want to get out of it. Many SME’s take on AP services to reduce overhead costs; however, there are many more benefits of outsourcing accounts payable processes. These include but are not limited to freeing up resources, minimising errors, improving efficiency and gaining the expertise of an experienced service provider.
How to measure performance?
Clearly defined SLAs and KPIs will not only provide clarity but will be essential in measuring performance of the accounts payable outsourcing providers. Professional AP outsourcing partners utilise project and process management methods that enhance overall performance as measured by time, expenditure, error rate, quality of work and internal control guidelines.
A good Service Level Agreement (SLA) will make sure that the process is well-organised, delivery is reliable, and the quality meets the best global standards. They ensure that your business objectives are being met according to the parameters you put into place. Top accounts payable outsourcing companies will already have processes for this in place.
What value will be added?
Any good outsourcing provider should be able to add value to your current accounts payable process. This may come in the form of saving time and costs and completing tasks more efficiently. AP outsourcing services could also provide value by implementing newer technology such as automation and cloud based services. Having access to a greater number of qualified professionals is also another value added benefit a good Accounts Payable outsourcing services supplier could deliver.
What type of experience does the provider have?
Many third-party accounts payable outsourcing companies can talk a big game about what they can do but can they actually deliver? An AP outsourcing services provider with longstanding experience with finance & accounting processes is a good sign that they know what they’re doing. It also pays to check out customer references and even get in contact with them to answer any queries before finalising on an accounts payable outsourcing company.
What data security measures will be put in place?
Sharing financial data – even if it is just invoices and purchase orders – online can be risky if appropriate protocols are not put in place. Whether it is paper documents, files in a digital format, or data inside the financial software you use, standard procedures enable you to share it in a secure way. A good accounts payable outsourcing company for UK businesses will ensure they comply with ISO information security standards, the UK Data Protection Act, GDPR and any other relevant standards ensuring security of your confidential data.
Most likely, your accounts payable outsourcing provider will be based in countries such as India, Philippines or Malaysia; so it’s vital to know how they will be keeping data secure in their country. Client data should be kept in highly secure servers with limited access – only authorized personnel can access the data on a ‘need to know’ basis, when they need the data to complete their work.
What will be the cost savings?
This is probably one the first questions any business considering outsourcing will ask. Although, the figure will vary depending on the size of the organisation and the number of transactions and vendors it deals with, many businesses have saved costs ranging between 30%-50%. However, the benefits delivered should be more than just cost reductions – streamlining processes and efficiency improvements can also add to the overall savings.
Do they support cloud accounting?
Utilising the cloud is really just a more efficient way for Accounts Payable departments to stay connected to their data and accountants. Whether your business is already using cloud-based accounting software or not it's always good to go with a supplier who has the capability. Depending on how your system is set up, it should be easy enough to integrate cloud components.
Do they have the ability to scale up?
When choosing an accounts payable outsourcing provider, it helps to understand their capabilities and how they will coincide with your company’s growth plan. As a business develops it would generate more invoices and have more vendors to pay. So your accounts payable outsourcing partner should also be able to scale up operations to handle the influx.
Conversely, it should also work the other way around. For example, if your business is having less AP processes to manage during holiday periods the AP provider should be able to scale back the staff accordingly or allow you to direct the resources on other tasks. This will give you the flexibility you desire from an FAO services provider.
How QX can help
Your accounts payable process has a huge impact on your cash flow, regulatory compliances and supplier relationships. But many companies still struggle with manual data entry of paper-based documents, leading to costly discrepancies and inefficiencies.
Our accounts payable outsourcing services have assisted clients in bettering the entire payables process. As one of the leading accounts payable outsourcing companies in India, we can deliver higher accuracy and decrease operations costs through process excellence, standardised accounts payable (AP) practices, and strategic use of automation.
We work with most of the major accounts payable software systems, and we can work with almost any software that you prefer. In addition, with the help of our in-house IT, we can help you integrate, implement, enhance and build systems and applications to streamline your processes.We also provide a dedicated Purchase Order system which can help your company digitize and automate supplier payments, where this will add value.
To learn more about how our team can help you, get in touch with us or call us on 0845 838 2592.