Accounts payable is a critical aspect of any business. To simply explain, accounts payable means that amount which is owed by a business to its vendors or suppliers for the good and services provided by them. They are categorized as current liabilities and need to be paid off within a year’s time. Like other aspects like the purchase of an asset, accounts payable have an impact on the profitability of a business. This basically happens in two ways- maintaining a good relationship with suppliers by paying their dues on time and ensuring positive cash flow.
However, accounts payable, when managed manually can become quite cumbersome, inefficient, and prone to human error. A business cannot afford any chances when it comes to its cash management. This is where Accounts Payable Software comes in.
What is Accounts Payable Software?
Accounts Payable Software automates the entire accounts payable process. This software provides solutions for automating the processes of basic single entry to advanced double entry, ledger, invoicing, inventory, and other features. They are a great way to avoid any human errors, keep the calculations accurate, get reminders to make payments, get notifications in advance to avoid getting penalties, etc.
List of Top Rated Accounts Payable Software in 2020
What are the key features of a good Accounts Payable Software?
More and more business now are looking at automating their accounts payable processes to save time in manually managing them and to have a more credible image. Before you purchase an accounts payable automation software, you should carefully assess the needs of your business and the amount of funds that you have to spare for buying this software. We are listing three key features that accounts payable automation software should most definitely have:
› Analytics and Insights:
A business, to stay profitable for a long time and to stay ahead of its competition, needs to pre-empt the changes in the market trends, patterns, and the preferences of the consumers, especially when it comes to cash management. The accounts payable automation software that you choose should have inbuilt analytics to help you project your income and expected expenses in the time to come. Choosing Accounts Payable Software with advanced reporting capabilities will help you manage your expendables and receivable effectively. This helps you in taking necessary corrective action when required before an issue snowballs into a larger problem.
› Data Exporting:
Financial management involves a huge amount of data. Having a lot of data, statistics, and numbers at your disposal will not serve any purpose if you aren’t able to make sense of them. Accounts Payable Software come with advanced settings to help you centralize your data and present it in forms of infographics, pies, charts, etc. which are easy to understand. The accounts payable automation software also helps in storing historical data for you to easily export & import data between different teams and third parties.
Without having a robust invoicing system, you cannot be expected to keep a track of your incoming payments. The accounts payable automation software that you choose should have features of storing past invoices, sending you automatic timely reminders whenever an invoice becomes due and track your unpaid invoices. This effectively streamlines the list of vendors who owe you money and when is it due to be paid to you.
What are the benefits of accounts payable automation software?
When you manage your accounts manually, you are not only at grave risk of human errors in your cash management but also are prone to lapses resulting in penalties. These issues can be avoided by purchasing a reliable accounts payable automation software.
Here are some of the benefits:
› It simplifies the process of accounts payable:
The process of managing accounts payable is quiet time consuming and monotonous for the person doing it. By using the software you need to enter the information only once. Accounts Payable Software effectively automates and digitizes the entire process. It helps you in knowing the payment habits of your vendors and when to raise invoices. It avoids the possibility of errors that might result in losses or penalties.
› Digital invoices:
Sending manual invoices is not only cumbersome but their management and filing is also difficult. Accounts Payable Software helps in digitizing your invoices and makes the process of sending them easier. This helps in receiving timely payments and managing positive cash flow in your business.
› Maintain positive cash flow:
Having to manually oversee the cash flow is a tedious task that is prone to errors. Accounts payable software helps you in simplifying this task and helps you in keeping a track of your incoming payments, due payments, and invoices. It also tracks your bills as and when they are raised for you to help you manage your cash outflows. By managing the cash inflows and outflows properly help you in preparing a proper balance sheet and profit and loss statements. This is helpful in evaluating the state that your business is in and projecting the future.
› Reduce costs:
By installing accounts payable automation software you eliminate the need to hire a huge team of accountants. This leads to the possibility of saving a lot of money that would have otherwise gone towards salaries and managing overheads etc.
Cost of accounts payable automation software
There are different types and versions of accounts payable automation software available in the market. The cost of the software depends on a number of factors like their features, availability, developer brand, etc.
For your investment to yield returns and for you to get maximized benefits, you should ensure that the software that you choose should be suitable to the needs of your business. You should try to not cut on the costs and invest in inferior quality software that might result in losses, errors, and penalties.
Now that we have understood all the important aspects of accounts payable software, we know that its importance for a business to be efficient and productive cannot be underscored. We understand that due to thousands of options available in the market, you might get confused. Ratings given by credible and reliable websites that conduct independent researches and comparison of software is the best way to make a sound technological investment.
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