Running a small business in Australia is not just about selling good products or great quality services to our customers; it is also about managing your finances properly and staying on top of them. You have to manage your financial transactions, keep track of your invoices and take care of your tax returns. But in all the important business and financial activities, one of the topmost activities that is overlooked is the management of your accounts payable services. The standard procedure for this process appears straightforward because it starts with invoice receipt followed by payment. Any employee who has handled this function understands fully well that managing it is not simple.
|
Did you know 60% of Australian small businesses face cash flow issues due to poor invoice management? This blog shows how outsourcing accounts payable can cut processing costs by up to 40%, reduce errors, and free up hours each week — all while keeping your business compliant and scalable. |
The complete payable process, which combines invoice processing with payment term coordination, timely payments, and error prevention, develops dynamically into an intensive, resource-intensive process. Australian small businesses experience these problems, which represent genuine risks for their expansion and harm their financial success. Accounts payable outsourcing services offer a solution for handling your payables more efficiently.
Working with a professional payable organization enables businesses to simplify their systems, reduce costs, and regain valuable time blocks. This blog explores the AP problems most frequently faced by companies, explains why outsourcing benefits businesses, and describes how Aone Outsourcing Solutions helps customers improve their financial operations.
Small business owners have to wear many hats, including sales, marketing, customer service, and finance. Accounts payable, however, must be firmly attended to; its accuracy and timeliness. The more invoices you have, the more complicated it becomes.
Here are the reasons why managing accounts payable is difficult. So why is it challenging here:
Different Payment Terms: Suppliers have differing payment schedules, namely, to be paid on credit or to pay cash on delivery. Late fees or strained relationships are the result of missing one.
Manual Entry: When entering invoice data manually, there is a chance for mistakes: the wrong amount or account number, duplicate entries, etc.
Lack of Visibility: There is no way to track what is due, what is overdue and how it impacts the cash flow.
Compliance Risk: Breaching ATO reporting requirements and failing to comply with Australian regulations can result in fines and audits.
But the fact is, these are nothing but time-draining, potential reputation, and bottom-line damaging issues.
Accounts payable outsourcing is a smart, strategic move in which a third-party payable company manages your entire payable process, from invoice collection to vendor payments and everything in between.
Whether you manage ten invoices a week or a hundred, outsourcing can improve your financial workflow by adding structure, speed, and accuracy.
Outsourcing your accounts payable requirements can have a lot of benefits:
Time is a very valuable resource for any small business owner. However, when you and your staff are always busy chasing invoices, chasing approvals on pending invoices and dealing with supplier calls they are not seeing the main areas of your business — sales, customer service or product development. While outsourcing your accounts payable duties would allow you to offload this time-consuming responsibility, your company would only be paying for the payable tasks completed by a dedicated team that manages the whole of the payable process with them.
The days of you spending hours entering invoice details manually, checking bank statements, and then manually searching for receipts and additional documents are long gone. Instead, it creates a smooth, hands-free workflow as you are able to run a better business without hiring new in-house resources.
|
Pro Tip: You can use the time saved by outsourcing to develop better customer relations or put in place business growth plans. You can check that outsourcing brings great productivity to your team. |
Running AP internally demands more than having a bookkeeper on staff. Operating accounts payable requires accounting software and training solutions, compliance tools, documentation storage solutions, and an allocated payroll cost for finance department personnel. These costs remain hidden in the long run because AP team mistakes could lead to financial penalties and supplier problems.
Outsourcing services allow access to complete payable company services at lower prices than maintaining these expenses in-house. These services include expert professionals who work through established systems at costs lower than full-time employment and software license fees.
|
Pro Tip: Before comparing outsourcing expenses, you have to calculate all the current AP operational fees, personnel costs, software subscription rates, and penalty charges for late payments. By this you can check how outsourcing services can increase profit margins for you. |
Manual data entry is a place where errors easily occur. There are serious financial consequences to duplicate payments, incorrect supplier details, a missed due date on an invoice, etc. While simply costing you money, errors in accounts payable don’t just have the negative effect of delaying tax reporting—that error can affect your credit rating, damage relationships with your suppliers and hold you up in paying taxes.
When you outsource your accounts payable services, you have access to double-verified systems, automated tools like OCR (optical character recognition), and very experienced people to validate the invoices before payment. This drastically minimises the risk of human error and makes your financial reporting more reliable.
|
Pro Tip: Check how your outsourcing provider has internal quality control in place, including the technologies they use to ensure data on invoices. You can improve financial health and fewer supplier disputes with a strong protocol. |
Poor Cash flow is one of the big reasons for business loss. Small and growing companies are especially affected, as the risk of business failure is high. You may struggle with payments and/or miss out on early payment discounts without a clear view of what is coming in and going out. Rushed decisions can also occur if a disorganised payable process creates confusion around outstanding bills and due dates.
Outsourcing lets you view accurate financial reports and dashboards in real time, track upcoming payments, plan disbursements, and manage your income and expenses effectively. Gaining visibility also means you can track the terms of your suppliers, negotiate for better deals, and avoid nasty surprises regarding your cash flow.
|
Pro Tip: You can ask your outsourcing partner to provide you with cash flow reports so that you can get the idea of seasonal trends and payments management. This will enable you to have a wiser budget and better financial control. |
You have to follow many compliances in Australia for small businesses. There are numerous key GST rules that you need to follow, such as ATO reporting and business activity statements (BAS). Not complying can get you audited, fined and tarnished.
Working with a trusted accounts payable outsourcing provider ensures that your subsidiary in Australia's services are up to date with changes in Australian tax laws to ensure that your payment processes are up to date. They also have clear audit trails, providing you with easy access to respond to ATO queries or prepare for year-end tax filing.
|
Pro Tip: Verify that your provider can handle local tax compliance and match your accountant’s standards for your accounts payable solution. This will ensure that your books are coherent with official submissions and that your tax processing is smooth. |
Your financial responsibility grows as your business does. That can quickly overwhelm a small team handling more and more invoices, vendors and payment cycles. However, hiring more staff is not always an option, particularly when you’re not sure about the loads for a long time.
Outsourcing allows you to increase (or decrease) the number of accounts payable services your business requires depending on market demand. Whether you’re launching a new product line, opening up in new markets, or experiencing a seasonal sales surge, your payable company can adapt their services to fit your needs without requiring you to change how you run your company.
|
Pro Tip: Find a provider with service models that offer you the option to start small and grow in conjunction with company growth as needed. With this scalability, you’ll never be over-committed to your budget or resources; you will always be at the right support level. |
Account payable management doesn’t have to be a drag. If you use the right accounts payable solution, your business will get more efficient, more accurate and more at peace. Outsourcing this very important function to a trusted partner such as Aone Outsourcing Solutions will not only solve your cost issue but it will also guarantee elimination of errors and recapture of your time.
Interested in simplifying your payable process? As your strategic partner in growth, Aone Outsourcing Solutions can be a growing solution for your business.
Now, contact us with any questions you have about our accounts payable outsourcing services, which are tailored especially for Australian small businesses.
