Best Practices to Boost Account Payables In 2022

Accounts payable (AP) has been viewed far too long and far too frequently as simply performing a necessary but somewhat repetitive back-office function. Invoices are received, and payments are disbursed. However, as CFOs and other finance executives have recognised the added value that Account Payables in 2022 can provide (for example, improving cash flow), there has been a push for those departments to develop and implement best practices.

Every AP department should strive to be best-in-class; to do so, it is necessary to transform the overall Account Payables practices process; specifically, how it handles invoice processing, from data entry to invoice matching to approval workflow and, finally, payment.

Account Payables In 2022

Recognising the accounts payable process

Companies now recognise that, while the accounts payable process is only one step in the overall procure-to-pay (P2P) transaction cycle, it is the one step in ensuring payments are accurate, timely, and free of fraud.

The AP department receives invoices, and the data on those invoices must be captured and coded with accurate accounts and cost centre data, either through automation or manual keying. The invoices must then be matched three-way or two-way against purchase orders and, if possible, receiving notices. At that point, the invoices are either sent directly to your ERP or Account Payables practices, or they are routed to the appropriate people for approval before being posted for payment.

Accounts payable best practises: 7 best practises

When you optimise accounts payable by streamlining invoice processing, you can create a situation in which accurate invoices are automatically sent straight through to the ERP or accounting system for payment, freeing up the Account Payables practices department with no human intervention focus on exceptions.

That extra time saved can increase cash flow, improve supplier relationships, uncover advantageous payment terms, and better manage working capital and working capital loans.

Each of the 7 practices listed below is one that every AP department must adhere to to ensure that payments are accurate, timely, and free of fraud.

1-Consider a paperless automation solution

Whether or not you use an Account Payables practices software solution to automate your processes, each practice on this list should be followed. However, optimising these practices when you eliminate paper invoices and manual processes that are inherently costly, time-consuming, and prone to human error. Thus your processes become much more likely.

2-Sort and organise invoices

Keeping track of what needs to be paid and when depending on the size of your business and the volume of invoices received is critical for managing cash flow while avoiding late payment, which can harm supplier relationships. When establishing priorities, invoices should be paid according to their due date and payment terms.

3-Simplify your workflow

Streamlining the approval process entails centralizing and standardizing processing and reporting. The more complex the system, the more likely errors or late payments will be more likely. Examine your existing workflows and identify bottlenecks in the approval process.

4-Establish a trustworthy fraud detection system

There is always the possibility of fraud when dealing with money. Fraud can originate from various sources, including cybercriminals, suppliers, and even your employees. When paper checks are used to make payments, the possibility of fraud increases. As a result, mitigating that risk is inextricably linked to adhering to policies and procedures.

5-Establish safeguards against duplicate payments

The steps for removing duplicate payments are similar to those for detecting and combating fraud, except that in this case, the situation is usually not intentional. Again, due to manual processes and paper, duplicate invoices may be sent through for payment. When using manual systems, especially when dealing with a high volume of invoices, an employee may enter both invoices for payment. A supplier may send an invoice by mail and then email the same invoice to ensure receipt.

6-Strengthen access controls

Implement internal Account Payables in 2022 review processes to identify areas where errors and bottlenecks occur. The greater the number of people who have access to the payables process, the more likely errors and duplicate payments will occur. Combat this by implementing internal controls, such as establishing a distinct separation of duties for each employee, ensuring that no single person has control over all steps (from invoice approval to payment), and limiting access to the Master Vendor File to specific individuals.

7-Attempt to standardize payment terms as much as possible

Standardizing payment terms allows you to free up working capital, gain greater control over cash flow, and optimize payment processing. This is especially true when dealing with many suppliers who want to negotiate their payment terms. Standardizing terms aids in the efficiency of your workflow. It also eliminates ad hoc negotiations with individual suppliers, hurting your DPO and the payable department's bottom line. Also, resolves Working Capital Problems.


Following these practices and constantly improving the Account Payables in the 2022 process will help streamline the approval process, eliminate late payments (and late fees), and give greater control over your cash flow. However, paper and manual processes will only make your goals more difficult. Implementing accounts payable automation solution is the fastest way to elevate your AP department to the next level and, eventually, best-in-class status.


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