By their very nature, the unsung heroes of business rarely get the credit they truly deserve. From interns and caretakers to coffee-bringers and cake bakers, it’s often the people that provide the little things in life that in fact make a big difference.
Indeed, many of these invisible yet critical employees can be found in any organisation's finance department, specifically in Accounts Payable (AP) office, whose responsibility it is to make sure that money owed is paid out for the right amount and at the right time (which makes all of our lives easier).
This is especially true for those businesses still using manual processing, where even the slightest of errors can lead to a significant financial loss. For example, one wrong formula in a spreadsheet or submitting an invoice that’s already been paid can not only cause a huge amount of time and resources to be wasted, but it could also lead to a lot more serious repercussions such as regulatory fines or fraud.
However, when provided with technology such as Accounts Payable automation, Accounts Payable (AP) administrators can enjoy a brand new and easier way of working. Rather than wasting AP staff time on highly critical yet error-prone and often tedious processes, such as scanning invoices or data entry tasks, it’s time to rewrite job descriptions by bringing finance into the modern world and making your Accounts Payable administrator happier.
To create an opportunity for improvement you need to understand the key AP administrator duties.
Sitting within the finance team, an AP administrator is responsible for handling the day-to-day tasks associated with processing business expenses, such as money owed to stationary suppliers or catering companies, for example. They are essentially a support service for both internal and external clients. This work is typically an entry-level position that kicks off a long career in finance and is an important part of learning how the finance function and businesses work.
This is an important role, as AP administrators are a key resource in preparing payments owed by the company to suppliers, vendors, and other creditors as well as keeping an up-to-date record of the business’ short-term debts. Although it would typically be up to the CFO, Finance Director, or Head of Finance to sign off on all payments coming out of the business, the Accounts Payable administrator would oversee putting together all the information needed to ensure a swift and secure invoice approval process.
Accounts Payable administrator duties also include the need to build relationships with suppliers and vendors. A large part of this will come down to how quickly and efficiently payments are made, so the role requires someone who can work to tight deadlines and stay on top of payments.
Being able to identify and highlight where issues might arise - such as approval bottlenecks or information missing from purchase orders and invoices - is also a key part of the job and critical to maintaining supplier relationships.
There are a few things you’ll need to enter the workforce as an Accounts Payable administrator, beginning with a relevant qualification. This might be in maths, accounting, or a finance-related degree from a recognised university, but it could even be certifications gained from accounting bodies such as the ACCA, AAT, or ICAEW. From an employer’s point-of-view, these shows a candidate who is above average, one that has a true an interest in the field, and also one that understands the basic job functions you’ll be required to undertake from day one. And don't forget, this kind of experience can also help to negotiate a higher salary.
Qualifications are great to showcase your ability to at least understand the theory behind Accounts Payable, even if you have yet to prove your skills within a working environment. However, to add to your theoretical knowledge, it’s also important to also have some industry experience under your belt and on your resume. This could be a part-time placement at a relevant company while studying at university (such as a bookkeeper managing a general ledger or an accounting clerk processing invoices), as part of a placement year, or even as an intern during the summer.
It also pays to hone up on your computer and ‘soft’ skills. Entry-level Accounts Payable administrator duties include a basic understanding of things like spreadsheets and accounting systems, as well as knowledge of how the AP function operates and why it affects the rest of the business. It’s important to have good computer skills, but if it’s an area you feel you are currently lacking in then you can always improve your knowledge by taking temporary (extracurricular) courses in accounting or general tech subjects.
The first step in the accounts payable cycle is to make sure that invoices are received, scanned, and recorded in the business accounting or Enterprise Resource Planning (ERP) system. Using a manual process, this would have to be physically done by Accounts Payable administrators and include the use of paper invoices, scanners, and filling out the appropriate form on the system. That might be fine if you’ve only got one or two invoices per month to manage, but now imagine if you’re a large enterprise with hundreds or thousands of invoices to organise. Not only does a significant portion of time become wasted on this, but it also leads to a higher chance of errors, duplicate payments, and late payments being made.
As a result of this, and the continued digitalisation of invoices and payments, more and more companies are looking to adopt automation within finance. Not only does automating the process reduce cost-pe-invoice and time taken to approve invoices by up to 80%, but it also increases the accuracy, security, and compliance of the Accounts Payable department. Other reasons to adopt Accounts Payable Automation include helping companies overcome labour and skills shortages or as part of a cost-effective tool that helps deal with rising costs and inflation.
This has dramatically changed typical Accounts Payable administrator duties - for the better. No longer do staff have to spend wasted hours on menial data entry tasks that don’t add value to the business. Instead, AP teams are freed up to focus on more important tasks such as financial reporting, supplier relationship management, or upskilling and training in other areas of finance such as accounts receivable or tax. Overall, adopting AP automation is a win-win situation for businesses, staff, and vendors, with everyone benefiting from a seamless payment experience.
The role of the finance professional is rarely celebrated, but the work that goes on in the department goes a long way in building and maintaining a healthy, growing business. Understanding money owed to suppliers and how it affects the financial health of the company is a vital part of this, and the reason why it’s so important that the Accounts Payable administrator duties are streamlined, optimised, and prioritised.
Not only that but ensuring accurate and real-time data in Accounts Payable is essential in providing an accurate and up-to-date balance sheet and for reporting. This can’t be provided while staff battle with paper documents, constant intervention, and other struggles as a direct result of utilising manual processes. In today’s modern world, AP staff deserve better, and keeping your finance department optimised must be a priority if businesses are to increase their financial performance now and in the future.