Accounts Payable System
We need a strong payables process so that it provides us with a high-productivity accounting solution to process vendor payments. An integrated payables process provides strong financial control so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts. Understand the key features of an effective accounts payable system.
Given below are the key requirements from any automated world class accounts payable system:
Flexibility:
Payables system should provide flexibility for managing and streamlining invoice and payment processing. The flexibility is required in the areas of account structure, multiple calendars, multiple currencies, multiple bank accounts, multiple payment terms and how the system helps entering the information by defaulting linked information from the master data.
Accurate Invoice Processing:
Payables system should provide controls and automations to improve the efficiency of invoice processing and simultaneously help ensuring the accuracy of payables information. Some automation features or best practices are automatically matching an invoice to a purchase order by providing the purchase order number. Defaulting the accounting details and other information based on the matched purchase order.
Invoice Approvals:
As controllership and sox requirement the payable system should support two-, three- and four-way matching of purchase orders, invoices, receipts, and requester acceptance documents. Further it should provide approval mechanisms to ensure segregation of duties.
Multiple Payment Types:
System should provide capability to handle every form of payment, including manual payments, wire transfers, bank drafts, electronic funds transfers, and automatic checks. Further these payments should automatically or manually reconcile with the bank statements.
Supplier Interface:
System should enable resolve business issues quickly by providing immediate and accurate responses to supplier inquiries. Ability to view Invoice and Payment status information together to take informed decisions and have a meaningful conversation with the supplier.
Additional Information:
Ability to record detailed information about suppliers, including their purchasing, payment, and invoice processing preferences, flexible address formatting for global operations.
Electronic Data Interchange (EDI):
This allows exchanging payables data with external parties like banks and suppliers. Ability to use EDI drastically reduces many manual steps.
Pay on Receipt:
This is a financials feature that automatically creates supplier invoices based on receipts and purchase orders information. An advanced feature will automatically create matched invoices, automatically approve invoices and then make EDI or other electronic payments to the supplier.
Open Interfaces:
Ability to bring procure to pay data from other systems to the payables system.
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