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A "Day in the Life" of a Modern AR/AP Professional

By ESOutlook | Wednesday, July 17, 2019
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The day-to-day task of an AR/AP professional is taxing and tedious. The processes are cyclic, un-ending, and iterative. With time, the clerks tend to err, creating discrepancies in company’s finances. Automation can help solve this phenomenon.

FREMONT, CA: A typical day in the life of Accounts Payables (AP) Officer revolves around activities related to verification of credits data, classifying the debts, and updating journal entries for transactions. The main job is to oversee a team of clerks, analysts, and accountants along with debt collectors. With each day, the officer ensures collaboration for successfully establishing the AR processes.

Procurement:

The purchasing department requests the order and transfers a copy of the Purchase Order (PO) to the AP department. The firm receives the order by a respective department, and the vendor sends the invoice to the AP.

Invoice Processing:

The AP clerk manually types in the invoice data into the accounting system, and company-specific naming conventions are used to avoid duplication. Information either new or old from a single supplier is cross-verified with both internal and external sources such as master vendor file and IRS TIN matching service.

Invoice Approval:   

A three-way match is conducted by the AP clerk to match the PO, receipt, and invoice for identification of any inaccuracies or wrong data. An AP manager reports paperwork for any exceptions in case of short delivery, incorrect items shipped, and damaged goods.

Payment:

The payment is prepared by either writing a cheque or setting up of an Automated Clearing House (ACH) or Electronic Funds Transfer (EFT), after the approval of a manager, controller or CFO.

Vendor Management:

The suppliers contact the AP department for payment verification and a clerk researches and determine the stage of approval of the invoice process or if the payment is in the mail.

System Upgrades:

The IT department supervises the company’s ERP systems; all hardware and software, the AP department is utilized to conduct daily tasks. The team approves the access and updates the equipment under CTO’s permission for the proposals by the AP department.

Reporting and Analyzing:

The AP department prepares the reports with the assistance of spreadsheets, which the clerks used to analyze all transactions, monitor the department’s performance, and tabulate the metrics. The CFO oversees the organization’s cash flow in conversations with AP director.

The AP/AR processes are continually occurring and evolving toward digital transformation as the manual processes create significant inefficiencies and overheads wreaking havoc in the company’s cash flow. With the implementation of automation, companies can reduce up to 10 to 20 percent in bad debt and can redirect savings back into the business.

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