A Deep Dive Into Accounts Payable Outsourcing 2025

By outsourcing accounts payable and receivable, you can free up precious time and resources. Instead, you get to direct your energy toward accounts payable outsourcing what truly matters – like refining your products, connecting with customers, and planning strategically for the future. Outsourcing not only brings expertise and efficiency but also lightens the load on your internal teams, making way for smoother operations and more focus on what makes your business thrive.

• Meanwhile, using AP automation with or without a payment service provider keeps teams in the driver’s seat.
• Although this can free up valuable time and resources for businesses to focus on other core activities, it may also lead to a lack of oversight and increased dependency on the outsourcing provider.
• Automated scheduling ensures timely payments, helping businesses avoid late fees and capture early payment discounts.
• As we established, outsourcing to an accounts payable service versus using accounts payable automation are different things.
• When you hire new employees, you don’t just hire anyone — you consider their skillsets to determine if they’d be a good fit for your company.

Accounts Payable Outsourcing: 4 Pitfalls & How to Avoid Them

Employees used to in-house processes may also struggle with new approval structures and dependencies with an external team. Partnering with an AP outsourcing company necessarily means adding a layer of communication between your finance team and your vendors. Even in a best-case scenario where everyone is on the ball, this means extra time to answer questions or resolve issues. Outsourcing can reduce processing costs by eliminating the need for an in-house AP staff.

Understanding Accounts Payable Outsourcing

Choose an outsourcing provider with robust security measures, including encryption, secure data storage, and compliance with data protection laws. Employing an outsourced AP team means sharing sensitive financial data with a third party, which introduces the risk of data breaches or unauthorized access to confidential information. Even with the best data protection measures, there is always some risk in handing over critical financial data. One of the most significant drawbacks of AP outsourcing is the reduced control over your financial processes. When you delegate AP tasks to an external provider, you no longer directly oversee the daily operations.

• There are numerous benefits to using an accounts payable outsourcing service that should be taken into consideration when determining if outsourcing is right for your business.
• The biggest players in the AP outsourcing industry include payment processing specialists, specialist software suppliers, and end-to-end outsourcing service suppliers.
• Businesses must invest in AP automation software and infrastructure, which may pose a financial challenge for smaller organizations.
• The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each supplier’s position within a given market.
• We reconcile accounts efficiently using various supporting documents such as bank statements and ensure that all the transactions recorded are consistent and accurate.
• Growing pains like these are a good sign but need to be sorted out quickly to prevent negative consequences for your company.

Accounts Payable Outsourcing vs. Accounts Payable Automation: Which Is Better?

• Manual AP operations such as invoice scanning, matching, validation, and approval can be streamlined and automated by outsourcing accounts payable services.
• Through ERP and other automated software, the entire accounting process gets fast-tracked and streamlined.
• The best data entry practices use a combination of manual data entry and automated data capture to extract and enter accounts payable from multiple sources including physical documents, scans and digital files.
• Both can help take a load off of your Accounts Payable department, reduce errors, streamline processes, and save your company money in the long run.
• Trends and techniques in accounting are always changing, especially as new technologies emerge.
• 3 Please note that funds relating to Currencycloud’s services are not FDIC insured or protected by the Visa Zero liability protection policy.

If these factors of outsourcing scare you, then the automaton of Accounts Payable with P3 Cost Analysts is the solution for you. For example, you lose full control of your business, you have to rely on a third party, and you have to share sensitive information. How these broader categories are addressed is determined by business priorities. The most effective SLAs measure an outsourcer’s performance through one or two carefully chosen metrics for every online bookkeeping function in a contract. An “extension of your team” mentality is important as well, prioritizing regular communication and transparency.

Invoice matching and validation

They also have strict security measures in place to protect your sensitive financial data. To evaluate the success and return on investment (ROI) of accounts payable outsourcing, businesses should establish clear metrics and methods for assessing both financial and operational impacts. This may include measuring cost savings, process efficiency improvements, error reduction rates, and vendor satisfaction levels. Successful accounts payable outsourcing partnerships should be built on a foundation of continuous improvement and adaptation.

Simplifying Payment Processing

Then it might be safe to say that accounts payable outsourcing is the best possible solution. If you are already in possession of an efficient AP team and are looking to upgrade their capabilities then accounts payable automation may be the way to go. When you decide to outsource your accounts payable functions, you give up some control over the process.

Faster turn around times

Gone is the ability to ‘pop in’ to check on the AP department and see how bookkeeping is going. With more than 25 years of finance transformation experience, our AP outsourcing services don’t just take https://www.bookstime.com/ over your accounts payable process – we optimize it. As most outsourcing providers charge per invoice, duplication errors can be quite costly. And as these providers could be thousands of miles away, keeping track of these duplicates can be difficult.

Once the planning phase is complete, the next step is selecting the most suitable outsourcing partner. This decision should be based on factors such as the provider’s expertise, technological capabilities, industry experience, and client testimonials. These concerns can make it very appealing to outsource some (or all) of the accounts payable function, which ironically, becomes another invoice.

GEP’s automated invoice data capturing process using OCR technology ensures accurate invoice data extraction. All standard invoice data and other essential information is captured and uploaded to your ERP system. Compare the proposals from different service providers against your objectives and budget. Look for providers that offer the best combination of quality, value, and compatibility with your business needs.