Our focused investment in establishing cutting-edge communication, collaboration, and delivery processes guarantees zero friction between your in-house & offshore teams. Lack of quality control, missing deadlines, errors and omissions are prevalent in the accounting profession, resulting in client dissatisfaction. In fact, you can outsource your entire back-office accounting function to RSM, flexibly and affordably.

• In this post, we’ll define and add detail to the practice of accounts payable outsourcing, but also examine the alternatives to accurately and efficiently manage a backlog of unpaid invoices, including AP Automation.
• When considering a major change to your processes, it helps to explore all your options.
• By partnering with us, you can tap into the vast pool of talented professionals in Latin America, drive growth, and increase the financial health of your company.
• When businesses outsource accounts payable, they can take advantage of early payment discounts.

When a company takes its AP department from in-house to outsourced, there is the possibility that entries will be duplicated. Before any changes take place, it would be wise to hold an internal meeting with staff to discuss the outsource partner, how this will affect workflow, and what employees can do to ensure a seamless transition. ARDEM Invoice Manager provides a window into the daily Account Payable processing. What is Aging of the vendor invoices, what are Reason codes needing resolution, which invoices are missing charge codes etc., all such account payable tasks are tracked on the ARDEM platform. Companies small or large are dedicated to the concept of outsourcing, as it empowers individuals and organizations worldwide to maintain a razor-sharp focus on what truly matters.

Outsourcing accounts payable data means sharing sensitive information such as BPO and bookkeeping details with third-party teams. This could create a potential gap in your business rules and data security systems. Accounts payable outsourcing refers to contracting with a third-party team to manage your accounts payable process. In AP outsourcing, activities such as managing short-term debts and creditors are conducted by qualified third-party AP teams. Challenge potential partners to detail a robust transition process that includes documentation, effective training, change management, and a structured solution for deploying automation tools. Make sure you understand how the transition will occur, how you will know it’s completed, and how the outsourcer measures success.

Reducing Paper Invoices and Manual Data Entry

Accounts payable operations involve the processing of invoices, the management of payment schedules, and the reconciliation of accounts. As such, it’s essential to choose a reputable and reliable provider of AP services. Checking references and reviews is a good way to vet potential providers and how to thank nonprofit volunteers during national volunteer week make sure they’re up to the task. For businesses that don’t have the internal resources to manage their AP department effectively, outsourcing to a professional AP service can be a smart solution. As a result, they may not be able to properly handle AP processes or resolve issues promptly.

The payable is essentially a short-term IOU from one business to another business or entity. The other party would record the transaction as an increase to its accounts receivable in the same amount. The accounts payable department in any organization takes care of maintaining records and processing all the invoices received from vendors & suppliers. By outsourcing this function, businesses can free up staff to focus on more value-added activities.

How To Handle Time Zone Differences when Offshore Outsourcing

It’s also worthwhile to take note of their office/staff locations as outsourced AP services can be hosted overseas, which can be a communication barrier. While mistakes are inevitable with any manual process, duplicate payments cost businesses money; a lot of money in fact. When upper management is looking at these costs from a high level, they will likely be interested in exploring all options for reducing those costs for invoice processing, including outsourcing. The efficacy of third-party service providers is difficult to gauge without implementing performance metrics and measurement tools. You may never know if they are billing for idle time, accessing non-work websites, accurately reporting issues, etc., if you don’t set expectations and check that they’re met.

Included in the monthly fee are infrastructure, recruitment and training, security, staff benefits and management. Sending accounts payable work to offshore staff allows businesses to focus on more complex requirements within their organisation. It also ensures that creditor payments are accurate and up-to-date so that you know exactly what your financial position looks like. Accounts payable is the money a company owes its vendors, while accounts receivable is the money that is owed to the company, typically by customers. When one company transacts with another on credit, one will record an entry to accounts payable on their books while the other records an entry to accounts receivable.

We offer a suite of services that leverage leading technology platforms tailored to your own unique needs. An increasing number of businesses are outsourcing their accounts payable processes to a specialized third-party team. Asking for references and case studies can also provide valuable insights into the provider’s track record and effectiveness in managing accounts payable processes for other organizations. While managing an internal AP team is simple, it is more difficult to manage outside service providers.

Security and SOC 2 Type 2 Compliance

“Outsourcing is absolutely good option for any small business CPA or even a medium sized CPA firm. Because outsourcing means you are not behind your desk taking care of all the work on your own but that you have a reliable source company out there who is tied to your hips that’s the way I see QX.” QXAS US was established in 2013 with the single-minded purpose of helping accounting firms succeed and it has done so with deep-seated commitment to this objective. We meet all the data protection and privacy regulations underlined by AICPA SOC 2 Type 2 and are also compliant with ISO for security and ISO 9001 for quality management. The QXAS academy assures QXAS of a steady stream of talented accounting professionals, enabling us to seamlessly build capacity for clients with outsourcing.

Outsourcing Drives Your Accounting Firm’s Growth and Profitability Objectives

The goal of accounting operations is to provide accurate and timely financial information that we can use for decision-making. When speaking with references, be sure to ask about the provider’s experience with similar businesses, their turnaround times, and their overall level of satisfaction. Finally, AP outsourcing may also cause disruptions to your AP department’s workflow, as AP outsourcers will likely need access to your AP system and data. For these reasons, it is important to weigh the pros and cons of AP outsourcing before making a decision.

However, this flexibility to pay later must be weighed against the ongoing relationships the company has with its vendors. The service provider should also have a sound understanding of the latest technologies and trends. Once the entire process is outsourced, the organization can focus on its core competencies, leaving the non-core competencies to be handled by experts.

The Cons of Outsourcing Accounts Payable Processes

Accounts payable outsourcing is the process of hiring a third-party provider to manage all or part of a company’s accounts payable function. As with any organizational change, teething issues may arise when a company decides to outsource its AP process. Transitioning from an in-house AP department to an external provider can potentially lead to duplicated entries and other early challenges. To address this concern, it is essential to conduct thorough research on the outsourcing provider’s privacy policies and security measures before initiating any engagement.

While outsourcing AP functions can offer numerous benefits, it also comes with potential drawbacks. Even the slightest error discovered in an account’s audit can lead to not only costs but also compliance issues. Manual data entry and the lack of control around purchase order requisitions, approval, and delivery account for many accounts payable errors. In any organization, the finance and accounting back-office support plays a pivotal role as a bedrock of the financial infrastructure.

Another, less common usage of “AP,” refers to the business department or division that is responsible for making payments owed by the company to suppliers and other creditors. The language barrier can also be an issue for offshore providers, although many companies require their employees to be proficient in English. The culture and time zone difference between the client and offshore provider can be a challenge for companies that outsource bookkeeping to an offshore provider. Any business that wants to stay afloat needs to maintain a well-run accounts payable (AP) department. This can lead to significant cost savings, which can be passed on to customers in the form of lower prices or reinvested in the business. Early payment discounts are a common AP perk, and they can result in significant savings for a company.