Accounts Payable and Accounts Receivables are two important practices in financial accounting. The first one is considered as the liability for the company whereas the second one is the asset. It’s important for every Business to properly manage both the accounts payable and accounts receivable section in order to maintain the proper cash flow of the Business. Most of the small Businesses prefer outsourcing accounts payable, reason being it’s a very crucial and time consuming task. The small business prefer to outsource it so that they don’t have to waste their money in hiring the staff for the same and also that by outsourcing they can focus on the core activity of their Business.
Outsourcing Accounts Payable
Many small Business organizations have understood that their Business can work more efficiently if they outsource Accounts payable. By outsourcing, the Manager can concentrate fully on his core task as there will be no hindrance like overseeing or assisting the accounts payable staff. Even the HR would be free from finding such candidates who have the required skill and education for the job of accounts payable. This entire burden can be reduced by simply outsourcing the accounts payable.
The outsourcing companies are efficient in these activities as this is their core Business and hence you don’t have to worry about the accuracy. For the small Business organizations the proper cash inflow and outflow is very important as they have limited cash sources. If the accounts payable section is not working properly and for that matter if there is any delay in the payment then the company can bear huge losses. The reason of losses can be the penalty that the companies have to pay because of the delay in payment, loss of discount amount which they could not take because of delay in payment and most importantly loss of goodwill in the market.
Quick Look at Some Benefits of Small Business Accounts Payable Outsourcing:
1) Timely payment of all the invoices on or before the last due date as per the company policy.
2) Checking and cross verifying the accuracy of all the due invoices.
3) The annual reports is readily available monthly, quarterly, half yearly and annually.
4) Any new improvements can be incorporated immediately.
5) The company will receive the best service at a lower cost than what it would have cost to them if they would have hired their own in house accounts payable team.
6) If the accounts payable services are outsourced to India then it costs quite economical to the other countries.
7) If any cross checking needs to be done with reference to any particular account then it can be assessed quickly and any action regarding that can be taken fastly.
8) Cost of annual or monthly training to the in house staff will be saved.
9) The CEO’s and the Directors of the companies can have a ready clear picture about the liabilities of the company and they can plan the future finances accordingly.