Automating Accounts Payable with Bill.com
One of the more time-consuming accounting tasks within most small businesses is paying bills. The main reason why is that the process has remained a process focused on paper documents (bills, checks, postal mail, etc.)
Let's look at some of the typical steps in your current paper focused accounts payable process. When reading below think about the time being spent to do each step focusing in on the movement of paper from person to person within your organization.
Opening and sorting bills.
Tracking down the appropriate bill approvers and waiting for approval.
Entering the bills into the accounting software after approval.
Printing out open invoice reports for payment scheduling.
Retrieving the checks from a locked cabinet.
Printing out checks.
Locking up the unused checks.
Attaching invoices to checks for final approval and check signature.
Stuff signed checks in envelopes and run through postage machine.
File away paid invoices.
Now think of time wasted when things don't go to plan like bill approvers not in the office, running out of checks, printer jam, out of postage, none of the check signers available to sign checks or the dreaded misplaced payables folder!
Here is a summarized workflow of a typical Bill.com accounts payable process.
Step 1a - Open bills, scan, then email to Bill.com, or
Step 1b - Give your vendors your Bill.com billing email address and they can send digital invoices straight to your Bill.com account.
Step 2 - A designated individual at your company or our firm reviews the initial automatic data input performed by bill.com for accuracy including the general ledger account(s) the expense needs to be posted to in your accounting software.
Step 3 - Designated bill approvers within the company review scanned bills online at Bill.com and approve them.
Step 4 - After approval, the authorized check signer(s) review the approved invoices and schedules payments online through Bill.com.
Step 5 - Bill.com via ACH debits the company's bank account and sends payment to the vendor.
Note - Depending on the integration established with your accounting software all of the above steps are sync'd either automatically or on demand with your accounting software. Even if your accounting software doesn't directly integrate with Bill.com, accounts payable and payment information can be exported in ready to import .csv files. No data entry!
Notice the big difference? After the first step the process has become all electronic from data entry to payment of the bill.
For most of our clients this is one of the first additions that they add to their current accounting system due to the the time savings, conveniance and pricing.
In future posts we will be discussing using Bill.com to automate your receivables process, creating cash forecasting reports with bill.com and integrating bill.com with applications such as QuickBooks (Online and Desktop) and Hubdoc.
Mike is just a technology focused beancounter who says everyday "there has got to be an easier way to do this!" Click here to learn more about him.
At Loiselle & Company CPAs, Ltd. we specialize in creating cost effective accounting systems for small businesses that take advantage of cutting edge technology. Contact us today at 401-300-2345 or info@loiselleandcompany.com to find out how we can help your small business.
