Accounts Payable: A Day in The Life
Education
Introduction
In the world of corporate finance, the role of an Accounts Payable (AP) manager is both critical and demanding. As someone who has served as a corporate controller for several years, I can attest to the unique challenges and routines that come with this position. The common phrase "Where is my money?" echoes through the office daily, illustrating the urgent need for timely payment processing and effective communication with vendors. Let me walk you through a typical day in the life of an Accounts Payable manager and share tips on how to excel in this role.
Morning Routine
As an AP manager, you typically start your day with a much-needed cup of coffee to gear up for the challenges ahead. After booting up your computer, the first item on your agenda is managing emails. You’ll often find a barrage of messages from vendors inquiring about their overdue invoices—some of which may be more aggressive in tone than others. Your job involves sifting through these communications to determine the cause of any delays and providing updates accordingly.
Invoice Processing
Next, you'll tackle a fresh batch of invoices that have arrived via various channels—through email or traditional postal mail. Despite the digital age, many vendors still insist on sending invoices by mail, requiring you to manually open, scan, and save them as soft copies for your records.
Before delving into processing, another caffeine boost is necessary. Processing invoices means obtaining approval for the expenditures and coding them into your accounting system, categorizing them by general ledger (GL) account, department, and location.
Payment Processing
After tackling approvals, it’s time to make payments on the already authorized invoices. Over the past couple of decades, payment processing methods have evolved significantly. Rather than cutting physical checks, you will often execute payments through platforms integrated into your accounting software—this might be ERP systems like NetSuite or dedicated payment platforms like Bill.com, Tipalti, or Coupa. This efficiency helps to minimize errors and reduce the time spent on manual processes.
Month-End Duties
As the day winds down, you prepare for the next day's month-end activities. This includes important reconciliations of cash accounts and accounts payable balances. Reconciliation is a key internal control process that ensures all cash disbursements and liabilities are accurately logged in the books.
Tips to Stand Out
To truly excel as an AP manager and show that you can handle more than just the basic tasks, consider implementing the following best practices:
Integrated Payments: Streamline your payment process by making payments directly through platforms that support invoice processing within the same system.
Self-Onboarding Vendors: Facilitate the onboarding process by enabling vendors to enter their information directly, thus reducing errors in banking details.
Implement a Purchase Order Process: Establish a system for securing approvals before expenditures occur to manage spending more effectively. This can be achieved with tools like Google Forms.
Utilize KPIs: Establish key performance indicators (KPIs) like Days Payable Outstanding (DPO) and error rates to measure and demonstrate the efficiency of your accounts payable process.
These practices not only make your work easier but can also help you rise above the conventional expectations of an AP manager, showcasing your capability to handle complex financial operations.
Keywords
- Accounts Payable
- Invoice Processing
- Vendor Communication
- Payments
- Self-Onboarding
- Purchase Order Process
- Key Performance Indicators (KPIs)
- Reconciliations
- Financial Management
FAQ
What does an Accounts Payable manager do?
An Accounts Payable manager oversees the payment processes for company invoices, manages vendor communications, and ensures timely approvals and payments in accordance with corporate policies.
How do I streamline my invoice processing?
You can streamline invoice processing by using ERP software that integrates payment processing, allowing you to manage invoices from a single platform.
What are some common challenges faced in Accounts Payable?
Common challenges include delayed payments, vendor disputes, missing invoices, and ensuring accurate coding of expenditures.
What are KPIs, and why are they important in Accounts Payable?
Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively an organization is achieving key business objectives. They are crucial in AP for analyzing performance and identifying areas for improvement.
How can vendors submit their information more accurately?
By implementing a self-onboarding process, vendors can fill in their own details directly through a designated link, reducing errors that can occur when they're entered manually by your team.
