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It’s easy for small businesses to focus on core activities and overlook the importance of accounts payable. While your method of managing accounts payable won’t in itself distinguish you from competitors, it is well worth it to identify and implement ways to optimize your process. In doing so, you will free up extra cash to improve your bottom line and spark business growth.

 

Here are 4 practices to optimize your accounts payable:

 

Negotiate

Don’t be afraid to negotiate with vendors for the payment terms that work best for your company.  Make sure you research potential suppliers thoroughly. It will give you the capability to request that a supplier match his/her competitor’s rate. If that’s not possible, find other ways to negotiate, such as an adjustment to the payment term length or a discount on bulk purchases.

 

Go Paperless

A digital system will centralize your data and reduce your risk for error. Paperless options make it easier to quickly record and review important data. For healthy accounts payable, it’s crucial to routinely track changes and keep information up-to-date. Digital systems provide the efficiency required to manage workflows, adhere to compliance regulations, and maintain payment accuracy.

 

Set up a Supplier Portal

Another way to cut down on cost and mistakes is to set up a supplier portal. This will allow suppliers to stay up-to-date on orders and important information. Additionally, a portal allows vendors to submit invoices electronically –a feature that can enhance supplier relationships. E-invoices can provide the visibility you need to budget accordingly and pay vendors on time.

 

Accounting Reinforcement

It’s important to stay on top of accounts payable, but if you don’t have the accounting to back up your supplier decisions, you could quickly find yourself in a cash flow nightmare. All your financial records must be up-to-date to reflect current balances, prevent overspending, and ensure billing accuracy. It’s crucial that you carefully track all payments, not just the payments to vendors. Check out our blog post “5 Ways To Keep Your Head Above Cash Flow” for tips.

 

Strong accounting is the corner stone to a successful business. If your small business accounting seems too overwhelming, don’t hesitate to call in the reinforcements at We Spark Growth. We’ll take care of your back-office functions so you can focus on developing your unique business. Contact We Spark Growth at 612.351.8180 or Inspired@WeSparkGrowth.com.

 

Our team of experts is standing by to help you spark growth.

 

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