Best Accounts Payable Software

Guide to Accounts Payable Software

Accounts payable software is a computer application used to record and manage accounts payable data. It helps business owners, managers, and bookkeepers keep track of how much money they owe vendors, suppliers, contractors, and other creditors.

The software automates most of the accounting tasks associated with managing payables such as entering invoices, tracking due dates, paying bills on time, and creating reports. Most packages come with features like automated reminder systems for late payments and integration with payment processors like PayPal or Stripe. Accounts Payable software can also generate useful insights into a company’s financial health by providing an up-to-date snapshot of all current liabilities and cash flow forecasts.

In addition to recording transactions, accounts payable software also contains features that streamline the entire process from start to finish. For example many packages feature vendor portals that allow vendors to enter their own invoices electronically which are then automatically processed in the system. This eliminates manual entry errors and saves time for both parties involved in the transaction. Some programs also have built-in approval workflows that require certain levels of approval before a payment can be made to ensure accuracy and compliance with corporate policies.

Overall accounts payable software is an invaluable tool that can save both time and money while helping businesses stay organized and remain compliant with various regulations related to financial management. It’s important for businesses of any size to make sure they are using the right package so they get access to all the features they need without overpaying for unnecessary add-ons or extra capabilities.

The Benefits of Accounts Payable Software

1. Increased Efficiency: Accounts payable software helps to automate the accounts payable process, eliminating manual paperwork and manual data entry. This streamlines the process, allowing companies to complete tasks with greater accuracy and speed, which can help reduce errors and improve the overall efficiency of the accounts payable department.
2. Improved Accuracy: Accounts payable software can help to reduce the occurrence of errors in the accounts payable process. Automated data entry, for example, helps to reduce the potential for data entry errors, while built-in validation rules help to ensure that invoices are accurately recorded, thus helping to improve the accuracy of the accounts payable process.
3. Increased Visibility: Accounts payable software provides real-time visibility into the status of all accounts payable activities. This allows organizations to better monitor their accounts payable activities, identify potential issues and take corrective action.
4. Improved Compliance: Accounts payable software helps to ensure compliance with legal and regulatory requirements, as well as with internal policies and procedures. Automated processes help to ensure that all activities are completed in accordance with applicable laws and regulations.
5. Reduced Costs: Automating the accounts payable process can help to reduce the costs associated with the process by eliminating manual tasks, such as data entry and filing of paperwork, as well as eliminating the need for multiple people to manage the process. This can result in significant cost savings.

Features of Accounts Payable Software

Invoice Management

This is the process where purchasing invoices, whether created by an ERP or by an accounting software, are transferred to the accounts payable automated solution to be processed. Features of invoice management include optical character recognition scanning, data transfer, and the transferring of files in electronic formats, such as PDF.

Supplier Management

Bank errors can be avoided if a business keeps an accurate supplier financial records. These records also ensure that vendors are paid on time. Accounts payable for supplier management typically entails the financial information needed for payments.

Personal Order Matching

It is important for a business to guarantee that suppliers are only invoicing them for products and services they receive. Prior to sending the product, a vendor may agree on the number of products sent, the price of the products, and the terms of the invoice. PO matching guarantees that this information stays constant throughout the ordering process.

Payments Management

This differs from payment processing. The goal here is to know what invoices have already been paid, when an invoice is due, and if there has been an invoicing error. This feature tracks invoices to ensure that they are not overpaid or underpaid.

AP Automation

AP automation software is a type of business software designed to streamline Accounts Payable processes. It automates manual, paper-based processes like invoice processing, payment initiation and reconciliation. Additionally, it provides tools for user access control and visibility into an organization's financial activities. The use of AP automation software can provide organizations with greater control over their finances while simplifying and expediting daily operations.

Approvals

Managers need to have the power to determine when invoices should be paid and what invoices need to be paid. Approvals are required when an organization sets a limit on how much an invoice can be before it needs to be processed manually.

Additional features of accounts payable software include:

• Document Storage: Accounts payable software can store and organize documents related to invoices and payments. This can help streamline invoice processing and payment tracking, as well as reduce paper clutter.
• Reporting: Accounts payable software can generate reports on invoices, payments, vendors, and more. This can help provide key insights into the financial health of the organization and enable better decision making.
• Security: Accounts payable software can provide secure access to data and documents, as well as audit trails to track changes. This can help protect the organization from fraudulent activities and ensure that all users have access to the information they need.

Things to Consider When Purchasing Accounts Payable Software

Integration Capabilities

Most businesses have other applications they use for finances and accounting. You want the accounts payable software you use to communicate with them. Integration minimizes the need to reconcile entries in each system. Before purchasing AP software, talk to the vendor about third-party integrations.

The Ability to Customize Workflow Rules

General accounting practices dictate workflows. They are followed by accounts payable tools. Workflows that follow a template save effort, time, and money. However, if the tool is so rigid that it cannot be customized, it can minimize efficiency, hampering your accounting process if you have unique requirements. You want vendors to offer tool customizability.

Who Makes the Most Use of Accounts Payable Software?

Accounting Departments

Accounting departments must merge AP information with other financial information provided by the company they work for. It is imperative that any accounts payable software purchase allows accountants to import and export data. Errors happen. Accountants must have the tools necessary to identify if transaction details have been entered incorrectly, including payment terms, amounts, and invoice dates.

Procurement Teams

Accounts payable software can be used by procurement teams to verify that purchases and payables match up. Good business relationships are maintained when suppliers are paid on time. Suppliers know that they can trust a business that pays promptly and will reward regular payers with discounts and other incentives.

Vendors and Suppliers

Suppliers need access to online portals within accounts payable software that allows them to submit invoices and payment information. They also need to communicate with their customers. They must be able to track the status of invoices and payments for the services or products they have delivered.

Executives and Managers

Upper management is keenly interested in AP processing activities. By monitoring these, they can adjust manpower, making the most of working capital and optimizing performance. They are able to dedicate less time to fixing errors and more time to improving vendor relationships. They are also able to dedicate their efforts to adding value to their projects.

Reasons to Use Accounts Payable Software

Payments

This software makes it easier to identify payments that are late or incomplete. Monitoring supplier payments, making sure that payments do not fall through the cracks, and other benefits are offered by the software.

Invoice Processing

Inaccurate invoice amounts might be easily caught and rectified with a small business. For large corporations that process tens of thousands of invoices annually, a variance of just $0.10 could mean a loss of hundreds of thousands of dollars in revenue.

Productivity

Accountants who spend a bunch of time on manual tasks waste energy. Accounts payable is a time-saving tool. It allows accountants to allocate more of their energy to projects that are more productive.

Data Capturing

Manually entering data into a system is tedious and is prone to human error. Some of these errors may not be identified until the month ends. This could lead to unnecessary expenses. Accounts payable software lets software automatically capture data from invoices and then links this information to the organization’s ERP and accounting solutions.

How Much Does Accounts Payable Software Cost?

The cost of accounts payable software can vary depending on the size of your organization and the features you need. Small businesses with basic accounting needs may be able to get by with a simple cloud-based accounting package that charges a monthly fee, while larger businesses might require a more comprehensive and customizable solution with a one-time upfront cost.

Accounts payable software often includes features such as automated invoice processing, payment tracking, vendor management, and fraud detection. The cost of the software will depend on the type of features you need, and the complexity of your accounts payable system. For example, a mid-sized business with more advanced needs might pay upwards of $4,000 for an enterprise-level solution with payment integration, automated invoice matching, and multi-currency support.

On the other hand, small businesses can find cost-effective solutions starting at around $30 per month, or even free open-source packages if they don't need the extra features. Additionally, many businesses opt for a combination of cloud-based and on-premise accounts payable software, allowing them to scale up as needed without a large upfront investment.

Overall, the cost of accounts payable software can range widely, depending on the size of your organization and the features you need. Be sure to do your research before deciding on the best solution for your business.

Trends Related to Accounts Payable Software

1. Increased Automation: Accounts payable software has become increasingly automated, allowing for faster data entry and more accurate payments. Automation also helps reduce manual errors and increases efficiency in the accounts payable process.
2. Improved Visibility: Accounts payable software provides real-time visibility into all of the accounts payable data, allowing for easier tracking of invoices and payments. This improved visibility enables users to quickly identify and address any areas of concern.
3. Streamlined Processes: Accounts payable software helps streamline processes, such as invoice reconciliation, vendor payments, and accounts payable reporting. This allows users to quickly and easily access all of the necessary information in an organized manner.
4. Enhanced Security: Accounts payable software enables users to better control their accounts payable data, with features such as secure user access and password protection. This enhanced security helps protect the integrity of the accounts payable data.
5. Improved Collaboration: Accounts payable software enables users to collaborate more effectively, with features such as shared calendars, document sharing, and team chat. This improved collaboration allows users to quickly communicate and collaborate on accounts payable tasks.
6. Cost Savings: Accounts payable software can help users save costs by eliminating manual processes and reducing errors. This cost savings can help businesses become more competitive and efficient.

How to Choose the Right Accounts Payable Software

1. Assess your needs: Consider the features and capabilities that are most important to you and your business. You will want to consider the size and complexity of your business, the number of transactions you process, and the number of accounts payable vendors you work with.
2. Gather information: Research different accounts payable software solutions available on the market and take note of the features and capabilities each one offers. Use the tools on this page to compare accounts payable software by pricing, user reviews, features, integrations, and more.
3. Talk to experts: Reach out to industry experts who have experience with different accounts payable software solutions. They can help you compare different solutions and provide insight into which one might be best for your needs.
4. Request demos: Request demos from the software providers to get a better understanding of how the software works and to see if it meets all of your requirements.
5. Make a decision: After assessing your needs, gathering information, talking to experts, and requesting demos, you can make an informed decision about the best accounts payable software for your business.

Who Uses Accounts Payable Software?

• Accounts Payable Clerks: Accounts payable clerks are responsible for entering, tracking, and managing invoices and payments. They also ensure accuracy and compliance with accounting principles.
• Accounts Receivable Clerks: Accounts receivable clerks manage incoming payments from customers, record payments, and reconcile customer accounts.
• Bookkeepers: Bookkeepers keep accurate records of a company's financial transactions, including accounts payable and accounts receivable.
• Accountants: Accountants use accounts payable software to generate financial reports, generate invoices, and track expenses.
• Auditors: Auditors use accounts payable software to review financial records for accuracy and compliance with accounting principles.
• Business Owners: Business owners use accounts payable software to track expenses and monitor cash flow.
• Procurement Officers: Procurement officers use accounts payable software to manage the purchase of goods and services.
• Suppliers: Suppliers can use accounts payable software to receive invoices and track payments.
• Credit Managers: Credit managers use accounts payable software to review customer credit histories and set credit limits.
• IT Administrators: IT administrators use accounts payable software to ensure proper setup and operation of the software.

What Type of Business Are You?

If you are a small business, you might be using QuickBooks to handle your accounting. QuickBooks is okay for smaller businesses. As your organization grows, QuickBooks usually cannot scale with you.

If your business is in a particular industry or if you cater to a specific niche, you might need additional functionalities that you will not find on a standard accounting platform. A nonprofit organization, for example, will need to have an accounting software that is tailored to address the specific tax issues they face.

Conversely, a construction company might deal with hundreds of subcontractors across several states or countries. They are going to need to have an accounting solution that is able to adjust to the tax differences from one state to another and currency changes from one country to another.

Before committing to an accounts payable solution, talk with vendors and the clients they have that are in the same industry as you. Make sure that the options they are providing you are right for your organization.

Do not attach your company’s financial future to a vendor that is with a fly-by-night company. Look for signs of stability, such as a growing customer base and regular updates to the platform. Mergers and acquisitions in this field are common. Smaller vendors are purchased by larger vendors. In most cases, nothing is going to change for you. However, if your organization purchases software from a vendor that is acquired by another vendor, the product line that has been acquired will sunset.

What Software Does Accounts Payable Software Integrate With?

Accounts payable software can integrate with various types of software, including financial management software, enterprise resource planning (ERP) software, customer relationship management (CRM) software, and inventory management software. Financial management software helps to provide financial analysis, budgeting, and reporting. ERP software helps to manage operations, customer relations, and products or services. CRM software allows businesses to manage their customer information, track customer interactions, and monitor customer requests. Lastly, inventory management software assists businesses in tracking stock levels, order fulfillment, and production planning.

Integrating different types of software with accounts payable software can help businesses automate their accounts payable processes. Automating processes can reduce the amount of time spent on manual data entry and ensure accuracy in data entry. Additionally, integrating accounts payable software with other types of software can improve visibility into the accounts payable process, allowing businesses to identify potential issues and improve efficiency.