The Importance of Accounts Payable for Year-End Closing
With the end of 2022 fast approaching, many business accounting pros and owners are closing out the tax year and the fiscal year as well. Year-end processing is a critical function for financial reporting and taxes, and it can be a stressful time for businesses who lack a seamless accounting process. For most businesses a review of accounts payable is a critical part of their year-end checklist
Common Year-End Checklist
Most businesses will probably have a year-end accounting process that includes the following checklist items.
✔ Collect and audit financial statements
✔ Review accounts payable and audit receipts
✔ Review accounts receivable, including aging receivables and past-due collections
✔ Reconcile all accounts
✔ Inventory count/audit
✔ Data backup
✔ Document preparation
For this post we are focusing on accounts payable. Because accounts payable is so detail-oriented and invoices often pass over multiple desks, a clunky AP process throughout the year can create major bottlenecks when closing the books at year end. To help you be better prepared for your next year-end closing we are offering these tips to help you optimize Accounts Payable. The tips below will give you a snapshot of ways to optimize AP for year-end closing. For a more in depth look at AP optimization, take a look a this post: How to Optimize Accounts Payable
8 Ways to Optimize Accounts Payable for Year-End
- Streamline with automated accounts payable workflows. Whether you build custom workflows in your accounting system or implement AP software, automation is key.
- Setup automated scans and alerts for duplicate payments
- Establish policies and controls for improved audit traceability
- Establish policies and controls, and install software to mitigate AP fraud
- Improve verification and signature processes with automated reminders and routing
- Go paperless–lost invoices or other documents can throw a big wrench into the accounting machine
- Audit accounts payable multiple times throughout the year
- Reconcile accounts every day
The Right Automation
When it comes to accounts payable, manual processing is just not a viable option anymore for businesses with more than a handful of vendors. But it’s also important to remember that not all AP automation solutions are created equal. Whether you are pulling your hair out from manual processes or your current automation just isn’t cutting it, the right solution can spare you and your team a lot of stress. When choosing accounting software, choose a solution that fits your industry needs, vendor needs and choose one that is designed for your general accounting solution.
Fidesic AP is designed to work directly within Microsoft Dynamics GP so you can process invoices and post right from a GP window.
