One of the most common activities of a small business owner is keeping an eye on the cash balance. Processing invoices and dealing with paperwork may be costly and time-consuming. In this post, we’ll look at a some of the numerous methods you may reduce your accounts payable processing expenses.
Opportunity #1: Go Digital
The Intuit Payment Network (IPN), in its transmission and receipt of money, is a best kept secret. You may set up your account free of charge and you can set up your recipient’s account free of charge. All you do is add your account, and only by having the email address of the recipient you may quickly transfer money between two accounts.
The recipient pays only 50 cents each transaction, so that it’s absolutely worth it, if you have a significant cash transfer. It saves you postage, stocks, envelopes and the corresponding mailing work. You might even raise your payment by 50 cents to get exactly what you owe to the recipient.
PayPal is another method to become digital.
Opportunity #2: Get Control
It’s never a smart idea to combine company and personal funds, especially when they’re coming out of the same bank account. Keep separate accounts for company and personal use, and your bookkeeping costs will be drastically reduced. Repeat the process with credit cards.
If you’re familiar with credit cards and can keep track of your spending, charging everything you spend on company to a credit card and paying it off every month saves accounts payable time. These days, using a credit card at the checkout is faster than writing a check, so you’ll save time on errands as well.
Opportunity #3: Automate
Put regular expenditures like utilities, rent, accounting, and other monthly bills on autopay or bank draft if the seller offers it. This will save you a significant amount of time, materials, and postage. You may also be more precise with your payment scheduling, allowing you to save your money for as long as possible until the due date approaches.
Opportunity #4: Verify
We hope you never have to pay bills that aren’t yours, but it’s possible. Implement a three-way matching procedure on all payables, especially those connected to inventory, to prevent it as much as possible. The three-way part refers to the three accounts payable documents: The Purchase Order, The Packing Slip, and The Invoice. These three papers should be compared line by line – for amount, price, and description – before any invoice is paid to confirm you bought and received what you paid for. Your bill should only be authorized after that.
Opportunity #5: Tell Yourself a Little White Lie
If you’re constantly transferring money from one bank account to another to handle bills and payroll, you’re not alone among small company owners. It takes significant time to complete all of these transactions, and it costs money to record and manage them.
All of that may be reduced by telling yourself a white lie about your money balance. If you have a $10,000 bank balance, convince yourself it’s just $5,000. (or whatever amount makes sense for you). As a result, you’ll always have a buffer in your account to assist you decrease transfers. There are numerous methods to include this “little white lie” into your stories.
Give these five accounts payable ideas a go, and if you have any questions, please contact us.