Here at de Jong Phillips, we are always looking for ways to improve our payment processes. Even processes that you’ve effectively done for your whole career are ones that you should review and reflect upon regularly.
Our top tip for your general supplier and employee payment process is to use technology to make your life easier. There are so many ways you can make this process hassle-free so that you can concentrate on the things that truly ignite your passion (which might not include making an invoice payment!).
So, we’ve rounded up our top 5 favourite tips to improve your supplier payment process and employee payment process.
You may not be fortunate enough to have an accounts payable department yet, but there are ways you can improve this process from today to help you streamline the process of paying vendors and anyone who supplies services to your company.
We want to ensure your vendor payments and supplier payments aren’t keeping you awake at night.
1. Use DEXT to get yourself organised.
We are big fans of Dext. This tool is top of our list in terms of making your life and the admin side of running a business loads easier. Dext is a software application that allows business owners to electronically capture and store receipts, invoices, and other supporting documents such as the purchase order you may receive when you supply goods to a company. These are the details that a business depends on to ensure you keep accurate and secure financial records. Dext removes the hassle of hours of manual intervention, enables you to introduce automation into your accounts and invoice processing, and ensures you keep up to date with all your vendor payments.
Essentially, you simply need to upload invoices and receipts straight to Dext. And cloud storage means no physical storage costs or hefty spends (and effort!) on retrieving archived files. Use Dext to get all your vendor payments into Xero as soon as you receive them. This will mean your expenses are processed in a timely manner and your cash flow isn’t affected by delayed expense claims. This type of automation improves the efficiency of companies and improves business operations. Plus, it helps company directors gain confidence knowing that their vendor payments system, a crucial part of any payments process, is robust.
2. Make the most out of Xero
Xero, a popular accounting system for businesses large and small, is brilliant in so many ways. It’s the ultimate tool to keep all the finances of your business on track, not to mention paying suppliers. Use Xero to monitor all your vendor payments and how they need to be paid and when. This not only helps you improve your supplier payment process – but it helps you stay as organised as possible. This cost-effective accounting tool which helps millions of companies around the globe will help you create a payments process to be proud of. Invoice payment will become seamless and your pay cycle will become regimented.
You will know when to pay each invoice once matched to its original purchase order, generate a receipt for the total amount, and get a real-time view of any payments leaving your bank account each day.
In all, this will mean you won’t be delayed on payments and you ensure that your suppliers and employees are kept happy. As we all know, happy employees lead to happy customers and this level of accountancy efficiency could help reduce the risk of a high attrition rate within businesses.
If you do have concerns about your accounts payable workflow or your purchase to pay cycle, it’s best to address this accounting issue now. Left unchanged, you could find there are hidden costs to your business due to a lowering of staff morale or supplier relations. Vendors look to work with companies who settle invoices as per the conditions agreed so please do reach out for support if you feel that your accounting system could benefit from a helping hand.
3. Be on top of your bookkeeping
This is a simple tip, but an essential one! Your bookkeeping may not be the most exciting part of running your business, but it’s a very important element to get right and to ensure you stay on top of your finances, nail your accounts payable processes and avoid any late payments.
Keep your bookkeeping up to date so that your ‘Aged Payable’ report is accurate and only shows those bills that are still awaiting payment. You may not have an accounts payable team yet, but this is something you can successfully manage from the outset.
4. Make your payment process automated
The word ‘automation’ can sometimes feel a bit scary and may make you feel like you haven’t got personal control of the process. However, you’re a business owner with many differing priorities and we know your daily agenda is jam-packed. Embrace the beauty of automation and let technology do some of the less fun work (like invoice payments) for you!
We strongly recommend you use Telleroo (or even better let us do this for you) to actually make vendor payments and supplier payments for you. This means making one payment to a company rather than (potentially) hundreds of payments and transactions at a time, once you have had invoice approval. Telleroo is a web-based banking system, where finance teams can make same-day bulk payments without the need for complex Corporate Banking Services. It comes with simple workflows enabling you to make hundreds of payments without any training needed.
This is just one example of using tech to keep on top of transactions, either when you are settling the invoices from suppliers or employee wages.
5. Make sure your vendor payments are scheduled.
We have worked with my small business owners, especially as they launch, where they are organising every purchase order and invoice one by one. We understand you want to ensure timely payments, but this isn’t always sustainable, especially if you are a small team managing 100s of invoices and bank transfers. Review your payment list and have a look at when payments can all be made in one go. Have you got a pay cycle process? Vendor payment management is an example of something that may feel overwhelming at the start, but once you get your head round the process you won’t regret it. This will not only improve your accounts payable process and supplier relationships but it’ll give you back some headspace to concentrate on your services and supply chain.
Your final steps should be to schedule a set time each month to do this. We recommend one mid-month payment run and one at the end of the month. It’s important to consider your payment terms as part of this process too. If your payment terms are beyond 30 days we recommend you consider changing this. If you are preparing and distributing purchase orders as part of your accounts payable process then it’s important to keep on top of your scheduling process even more so. Don’t have an accounts payable department? Don’t worry – we can support you with this!
Would you like us to help improve your accounts payable process?
Do you need support with your supplier relationships and the payment process? Perhaps you’re looking to shorten your purchase to pay cycle or improve the way you handle your invoice processing?
Do you think you could easily improve your employee and supplier payment processes using these 5 tips?
If you’d like any extra advice regarding the accounting tools we mention here and improving your current process – then get in touch today!