An accounts payable department is the business section responsible for tracking and paying all invoices. This process is crucial in any company, as it increases the speed at which payments are made and decreases the costs associated with managing a large volume of paperwork. How can the CFO improve an accounts payable department?
1. Get Rid of Paper Invoices
A CFO can significantly reduce the workload of an accounts payable department by reducing or eliminating paper invoices. Today, a major portion of invoicing happens via email or by using software that integrates directly with your accounting system. These methods eliminate the need for paper and streamline the process. A CFO can also decrease the amount of paper used by purchasing only what is necessary. A CFO can also put a policy of saving electronic copies of invoices in place. Doing this ensures that your company never loses an invoice and makes it easier to track payments.
2. Implement a Flexible Payment Policy
According to Entrepreneur Magazine, you’ll need to implement a payment policy that suits your business needs. Implementing a flexible payment policy allows you to make fast payments to those who need it and slow payments for those who can afford to wait. This decreases the stress on your accounts payable department by ensuring that there are never any late fees from clients.
3. Hire the Right People
When hiring an employee, it’s important to take their personality into account, as well as their skill set. A CFO can do this by hiring employees with various skills and personalities. Hiring hard workers who are good at what they do helps ensure that no one is ever left waiting for payment. Hiring those with the right attitude will help keep morale high in your department and improve efficiency.
4. Use Accounts Payable Automation Software
A CFO can increase the efficiency of an accounts payable department by implementing automation software that makes it easier to manage payments. This will save your employees from spending hours on tedious, repetitive tasks that add no value to your company. By decreasing the time it takes for an employee to complete a task, you’ll increase their efficiency and decrease the amount of stress they feel.
5. Budget Appropriately
Budgeting is an important part of any CFO’s job. A CFO needs to factor in the cost of accounts payable software and other expenses associated with hiring employees. A well-thought-out budget will help to make sure that your company never has high costs for managing payments.
6. Establish Payment Reminders
In many cases, an employee needs to receive payment when they’re expecting it. This can help ensure that they keep their end of a deal in mind when working on something for your company. A CFO can implement a payment reminders system that keeps employees on track and prevent late fees from being incurred.
7. Track Sales and Inventory
Another important function of an accounts payable department is to track sales and inventory. By tracking this information, it’s possible to make sure that you have the correct amount of money available for purchasing items. A CFO can do this by setting up a barcode scan system or by keeping digital records in your accounting system.
Small business owners and CFOs are always looking for ways to improve their work. By implementing these 7 tips, a CFO can help improve the efficiency of the accounts payable department and increase the speed at which payments are being made.