Accounts payable management software (APMS), also called accounts receivable management software (ARMS) is perfect for companies that want to make their invoice processing faster and lessen the errors when it’s done manually. This involves receipt capture and invoice processing features, including compliance and tracking features. If you want to know more about accounts payable management software, then keep on reading this article to find out.
What Are Accounts Payable?
Accounts payable isn’t just about being able to provide concise forecasts of your business cash requirements. The efficient accounts payable management involves real-time visibility and process control to financial obligations.
A good account payable management software is defined as an accounting method that represents a company or business’s obligation. This is to make payments in a short period of time to the creditors. It shows current liabilities in the balance sheet. It can also be a business division or department that carries their main responsibility of providing payments from the company to the creditors and suppliers.
What Are the 10 Things to Look for in Account Payable Management Software?
With so many accounts payable management software out there, which one will you choose? There are many features the software has that can benefit a company. However, after doing some research, there are things that you need to consider when getting the software. These are the 10 things you can use to compare accounts payable management software:
- Ability to manage 5 types of accounts. Since there are many accounts to choose from, it would be best if the software can accommodate all of the accounts available. This includes asset accounts, equity accounts, income accounts, liabilities accounts and expenses accounts.
- 1099 forms. Aside from the types of accounts, the ability to create 1099s solely for independent contractors is a big factor to consider.
- Import and export data. Bank statements are the most common files that are imported and exported.
- Sending invoices. Sending invoices is a breeze especially if you link it to your credit or debit card to pay your clients.
- Reporting features. It can generate simple accounting reports such as profit and loss reports and the balance sheet.
- Budgeting feature. It can create and manage your budgets to let you stay on track with your finances.
- Multi-currency support. This is especially useful for those that travel around the world or has employees that are outsourced. It lessens the chance of errors when converting to other foreign currency.
- Accurate information. You don’t have to worry about information being incorrect. It lets you know if there are missing data that you need to complete.
- One dashboard to view all. You’ll have immediate visibility to all of your data, making it easier for you to find out what you need to focus on.
- Integration of other software. Most accounts payable management software can be integrated smoothly and easily with other applications for your accounting data.
Why Do you Use Accounts Payable Management Software?
Instead of manually tracking your accounts payable and do data entry and phone calls, you can use accounts payable management software instead. This would help you focus on other strategic pursuits such as managing the working capital or set up a meeting with your co-workers. The main importance of accounts payable management software is to track down and manage your accounts payables. Once you have your recent open invoices, you need to gather the data to track them. Details that you’ll be tracking would include:
- Vendor/Supplier/Biller’s name. This is the name used to whom you are going to make a payment.
- Invoice number. This is the unique number on the invoice.
- Account number. Similar to the invoice, but is used as the account number of your vendor.
- Date of the received invoice. This is different from the date of the invoice as the date would start once the invoice has been received.
- Payment deadline. The date when the payment is due.
- Expense type. This talks about what type of product or service was paid for.
- Explains the category of the accounts payable, it may be paid, past due or awaiting approval.
Accounts payable management software will notify you to pay on time and provide possible discounts. It will help you avoid any late payment charges. You will also save money because you don’t have to hire any accounting staff that will process invoices. Your productivity will be more efficient and you’ll be able to focus on other accounting tasks or other process duties. Additionally, you’ll have full control of your accounts payables as you monitor your audit trails.
Accounts payable in a company is a vital part of their working capital account. If you have effective accounts payable management, it can greatly boost your company’s short-term cash flow. This happens by having strategic planning for your payments to the suppliers. Just make sure that excessive financing gives a direct impact on your company’s credit risk and temporary liquidity.
Setting Up Your Accounts Payable Management Software
Let’s now talk about some of the basics of accounts payable management software. The software follows an organized method to be able to run efficiently and effectively. What we’re going to tackle next is how to set up your accounts payable system. The steps on how to set up your software are as follows:
- Choose the software you need for your business. It is recommended that you get the software with the features mentioned earlier. If you want to know more about accounts payable management software or a list of their features, you can check com and type accounts payable management software.
- Set up fields in the supplier or vendor name. Once you have the software handy, it’s now the time for you to set up the information you need. You can enter the vendor’s name and other supplier information such as the payment terms, address, and general ledger information.
- Enter the invoices. Include the payable amount and the invoice date.
- Approve your invoices. You can set the system to have managers or other higher ranking representatives to approve your invoices once it arrives. If an invoice has not been approved, a notification will be sent. Depending on the software, it is also possible to track the status of your invoice approvals.
- Schedule your payments. Before scheduling your payments, run a test to see if it’s working. Confirm that all the invoice information is correct and the date range is correct. You should do this to make sure payments are paid on time.
For checks, also make a test run. Payments should be approved and a check batch should be printed accurately. Make sure that the system will only pay for the checks that are highlighted or selected.
- Sign your checks. Choose a person to be the primary individual to sign your checks. Have a backup person to sign for your checks. Ensure that they are trustworthy and has a keen attention to details. So you can make sure that the data is correct.
Other accounts payable management software offers the following features in setting up reports. These are:
- Procurement cards. It can set up procurement cards which are given to selected employees. These employees are the ones that are approved to purchase items using a debit or credit card. These purchases are made on behalf of the company.
- Three-way data match. It verifies that the supplier invoices are the same with your company’s received documents such as purchase orders. It also checks to make sure they are authorized purchases or received items.
- Expense reports. The software can be set up to submit any expense reports. Receipts may be included to the purchased items. One good example would be the travel expenses of an employee if they are delegates for a seminar or a convention.
In short, if you’re an accountant, bookkeeper or financial consultant that needs to record accounts payable, you need to input credit accounts payable once a bill is owed. Afterward, put debit accounts payable once the bill has been paid. So, if you receive an invoice, you need to record the amount as a debt. The accountant will need to input a debit in the correct category and the date when the debt occurred. Finally, the credit amount will be typed in the cash column once the invoice has been paid. This will balance the accounts payable.
A business that does not have bookkeeping can benefit greatly from accounts payable management software systems. This software is not only intended for huge companies but also for startup companies. Those companies that have a handful of employees could also be benefited. Using the software has helped a lot of companies save money, especially in costs related tasks like processing invoices.
Using accounts payable management software may need an investment and allotment of time to learn it. You’ll definitely save more in the long run, compared to manual account processing. You can learn more by reading accounts payable management software reviews by CrowdReviews.com. It’s not too late to get one and start automating your accounts payable management software now.
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