| Accounts payable along with Accounts receivable | | | | the invoices that fall due and make a one to one |
| is an important process in financial accounting, the | | | | co- relation of checks issued and invoices that |
| first being a liability and the second a liquid asset. . | | | | receive payment. |
| Proper management of accounts payable and | | | | 3. Monthly, quarterly, half-yearly and annual |
| accounts receivable ensures the proper inflow and | | | | reports are easily made available. |
| out-flow of cash. In other words the cash flow | | | | 4. Tax related work is done without loss of |
| depends on the skillful management of these two. | | | | man-hours at the company level and they all get |
| The companies have found managing this | | | | ready on time for the CPA perusal. |
| particular task a crucial but a time consuming | | | | 5. Compliance to Sox is automatically carried out. |
| process. | | | | 6. New improvements are incorporated |
| Accounts Payable In-house | | | | immediately. |
| In the present day the accounts payable | | | | 7. The company can demand the best service at |
| department started doing more tasks like | | | | the lowest cost from the provider. |
| checking and approving of invoices and bills for all | | | | 8. When outsourced to India or other countries |
| types of payments. It is a challenging task for | | | | the cost of maintaining such accounts is much less |
| small businesses where the invoices mount in | | | | compared to huge expenditure and capital needed |
| number daily, keeping track of them, even with | | | | for in-house department. |
| the latest innovations in accounting software, it | | | | 9. Any reference to any particular account can be |
| has become a difficult task. This occurs because | | | | assessed immediately and action taken. |
| the small business owners have varied | | | | 10.Need for continuous training of personnel is |
| responsibilities and establishing a separate | | | | avoided. |
| department may have to incur huge expenses | | | | 11. The expenditure connected to the provider will |
| and it also delays in execution and duplication of | | | | remain constant for a particular period of time |
| work. Also small businesses may not need to | | | | since it of contractual nature. |
| have an entire department dedicated to accounts | | | | 12. The managers or CEOs of small business will |
| payable and they may need it only during their | | | | have a clear picture of their liabilities and the |
| accounts payable time. In these situations it is | | | | nature of cash flow since the provider and details |
| more economical for small businesses to | | | | keep the account payable picture up-to-date are |
| outsource their accounts payable work. | | | | readily made available. |
| Outsourcing Accounts Payable | | | | 13. The managers or CEOs of small business can |
| Outsourcing accounts payable may enable the | | | | plan future plan-outlays with certainty. |
| managers to concentrate better on their regular | | | | Small business accounts payable outsourcings |
| work. On many an occasion it is reported that the | | | | have some risk |
| manger's valuable time is consumed in overseeing | | | | Outsourcing financial accounts payable even by |
| the regular administrative work. Next the HR may | | | | small businesses has come to stay. Hence it is |
| have to find the right people with the right | | | | imperative to be aware of the risks involved in |
| qualifications and skills to manage such work. The | | | | outsourcing any or all the accounts payable |
| infrastructure required to run such a department | | | | processes to an outside service provider. The |
| may have to be established. Many small | | | | understanding of the outsource service provider |
| businesses have realized the various benefits of | | | | of the needs of the clients and the provider's |
| outsourcing and have gone for small business | | | | quality of service may affect the performance of |
| accounts payable outsourcing. When small | | | | the small business. Other factors like the legal |
| businesses outsource their accounts payable, they | | | | implications; the company has to take on the |
| get relieved of the burden of doing the non-core | | | | responsibilities for all acts-inclusive that of the |
| works or oft repeated tasks. | | | | outsource provider. Combined with this the lack of |
| For small businesses any lapse in accounts payable | | | | knowledge of the modern developments in |
| may end up in a loss. The losses may occur | | | | accounts payable processes on the part of the |
| through penalties for delayed payments, loss of | | | | provider may add to the problems to the small |
| discounts offered for timely payment, and loss of | | | | businesses. The loss of control is another risk that |
| goodwill. Accounts payable is accounts receivable | | | | are faced by the small businesses. The outsource |
| to another company. Only when these two | | | | provider gets the information about the small |
| accounts are carefully managed the cash flow can | | | | businesses suppliers, cost, terms and conditions |
| be healthy. So companies allow discounts as | | | | etc., this may be vital information for competitors. |
| incentives, when they get payment on time but | | | | By carefully doing their due diligence in selecting |
| collect penal sums when they are in default. | | | | the outsource provider small businesses can |
| Following are some of the benefits of small | | | | completely avoid all the risks associated with the |
| business accounts payable outsourcing: | | | | accounts payable outsourcing and at the end they |
| 1. Paying the invoices on the due date as per the | | | | will gain all the benefits of accounts payable |
| company's policies. | | | | outsourcing. |
| 2. See to the accuracy and the authenticity of | | | | |