Ken Johnson, IQ BackOffice, discusses mistakes he sees accounting departments make when outsourcing accounting functions to execute their strategic plan.
Companies often choose to transfer recurring operational activities to an outside supplier with better technology, business processes, and lower costs to improve outcomes and maximize profits while minimizing risks.
AP Automation by itself, can lead to negative ROIs. The solution is to outsource the process to a reputable service provider like IQ BackOffice.
AP Invoice Processing clerks have been benchmarked for decades. The common figure is that an AP clerk processes about 1,000 invoices per month.
Managed payroll is outsourcing the responsibility of managing in-house payroll to a third-party managed services provider like IQ BackOffice.
Outsourcing Accounts Payable with a reputable third-party company like IQ BackOffice has many benefits. There is also one important drawback to consider as well.
Business Process Outsourcing (or BPO) is simply hiring another company to perform a specific function instead of doing it yourself.
AP automation vendors charge based on the number of system users and/or a fee per invoice - somewhere between $1.25 and $2.00 per invoice.
In this article, we take a look at Accounts Payable Automation, its components, how it is implemented, and the drawbacks as a stand-alone solution.
Companies turn to outsourcing for better technology, business processes, and lower costs to improve outcomes and maximize profits while minimizing risks.
Outsourcing accounting is generally worthwhile especially for businesses whose core-competencies fall outside of the financial and accounting disciplines.
Because accounting duties include many low-value transaction-laden activities, outsourcing and automation are viable alternatives to keeping them in-house.
Outsourced accounting costs are generally lower than the cost of having the accounting function operate in-house, generally between 30-75% of current costs.
Outsourcing accounting processes, for example, generally saves between 30% and 75% of current costs, while improving quality and timeliness.
Running payroll for your own business is something that can only be done successfully with a sufficient understanding of current payroll and taxation laws.
A streamlined Accounts Payable workflow is essential for managing the consistency, accuracy and efficiency of each step in the process from start to finish.
An efficient accounts payable process is critical to optimize working capital and measure operational efficiency for sound business decisions and planning.
There will always be potential risks in every partnership, however, the goal is to select an appropriate function for outsourcing - and the right provider.
To control outsourcing, the business will have to ensure there is sufficient communication between the business, the teams, and the outsourcing provider,
In very broad terms, outsourcing challenges can typically be categorized as organizational/culture challenges or system/process related obstacles.