Payable management is a process of planning the debts held by a company on purchases made from specific vendors. The main concept of payable management is to give a clear analysis of the expenses made by the company in delivering a product or a service.
In the last few years, the process of accounts payable has been automated. The companies are using electronic media to print invoices and to make payments (through EIPP and EFT). Automated systems provide an automated audit system where the companies can carry out payments and streamline the account payable transactions through computer.
1. Timing of A/C payable transaction: The payment timings and terms should be clearly mentioned in the software to support cash flow. The module should be set up in a way to keep a balance between positive cash flow and the negative cash flow. The software should conduct fast transactions of accounts payable.
Many companies define the accounts payable time through the annual turnover. Accounts payable modules helps the companies to make payments on time and improve their payment records, which further helps them to negotiate in a better way with their suppliers.
2. Automatic invoice generation: Systems such as OCR - Optical Character Recognition helps the companies to generate immediate invoices and speed up the work flow. The technology also reduces human error in invoice generation and any-time-audit of the transaction or the invoices can be carried out by the management.
3. Easy communication with suppliers: An appropriate software helps a company to divide vendors in various categories such as leverage, non critical, bottleneck or strategies. Depending on the customer type the software automatically sends alerts and messages to keep continuity in dialogue with the vendors. Most of the companies prefer to make payments to the vendors on time and software helps the companies to keep clear information about the critical vendors to clear debts and maintain a clear cash flow status.
4. Prevent frauds: Software can anytime be analyzed for the entries and sanctions made by the authorities. The clear technical procedure followed by the automatic system, reduces the chances of frauds. The rules are clearly mentioned in the software and the reports provide the exact information about the performance and modification made in relevant transactions at each level of administration. The software helps the company to get a clear analysis of the performance of the employees. Since, the job is done at various departments through various procedures, and frauds can be checked at each level of transaction.
5. Accuracy and legality: The accounts payable management helps a company to keep clear files of the vendors and prevent duplicate payment. Software can be featured to have the vendor verification modules, where the vendors are tested at each level of transactions and make sanctions through a series of government regulations. The software maintains the status of each vendor and payment with the records of it, which helps in getting accurate record.
