Managed Services for Streamlining Accounts Payable
Upstream And Downstream Process In Accounts Payable
In the age of technology and automation, finance executives are continually seeking new ways to streamline accounts payable processes. The key to achieving quicker, more streamlined operations is through effective management of upstream and downstream processes. Managed services for upstream and downstream process in accounts payable can be considerable helper. This comprehensive guide is intended to provide an in-depth overview of the concept and how to accurately implement the solution in the most effective manner.
At the onset, an understanding of the differences between upstream and downstream processes is essential. Upstream processes are the activities that are necessary in order to process payments and document the procurement cycle. This incorporates anything related to the preparation and submission of purchase requests, vendor contract signing and payment requests. Additionally, supplier setup, invoice creation and vendor maintenance are significant upstream processes. On the other hand, downstream processes refer to preparing banking instructions and verifying payments, recording invoices and generating relevant accounting entries, and archiving documents related to the payment transaction.
Managed services, leveraged for upstream and downstream processes for accounts payable, offer sophisticated solution for optimizing operations. At the core, the solution automates many of the Accounts Payable (AP) processes, allowing for swift and secure payment requests. This is of key importance when there are multiple vendors to manage or multiple payment requests in daily operations. Additionally, there is an enhanced level of control, which allows for better accountability and accuracy when it comes to transactions. This further helps to reduce the number of incorrect or incomplete payments.
When looking to implement managed services solution, finance executives must consider the individual organizations payment preferences. As this is typically the case, organizations need to realistically assess the vendor payment and accounting nexus in terms of automation and ease of reconciliation. Once assessed, the organization can start developing and refining the solution based on the necessary requirements as well as industry practices.
Throughout implementation, the organization is able to customize the managed services in order to ensure that they are in line with industry preferences and policies. For example, the majority of solutions would incorporate features such as coding, screening and verifying of payments, preparation of payment documents and submission of invoices. Nevertheless, depending on the organizations individual needs, additional features can be included, such as supplier analysis reports, the customization of invoices, drafting documents and archival.
Now that the solution has been tailored to the organizations needs, there is an additional step in the process, which is to integrate the automated system with the organizations internal systems. In other words, the organization would have to ensure perfect coordination between the payment solution and its existing information or operating system. This step is critical in order to ensure that the smooth functioning of upstream and downstream processes.
Consistent monitoring and auditing of the managed services system is the final component in the process. From an audit perspective, this component can prove to be especially useful as it allows finance executives to evaluate the effectiveness of the system, identify any discrepancies, and more accurately control fraudulent activities.
In conclusion, finance executives looking to optimize accounts payable processes, must consider utilizing managed services solution for their upstream and downstream processes. The key is to ensure that the solution is tailored to the organizations specific needs, integrated with the necessary internal systems, and continually monitored to ensure optimal performance. Such solution will provide superior control and accountability, further streamlining accounts payable operations.
