Truth Behind Accounts Payable Outsourcing and How It Supports Business

Have you heard of accounts payable (AP) outsourcing? Want to know what it entails?

Accounts payable outsourcing involves hiring a company to handle your business’ invoices, payments, and transactions with vendors and suppliers. Instead of hiring a full-time, in-house professional, you ‘outsource’ these tasks to a specialized team outside your business that handles everything remotely.

Let’s discuss some myths about accounts payable outsourcing and separate fact from fiction to help you decide if this solution fits your business.

Accounts Payable Outsourcing Myths Busted

Here are some common misconceptions about outsourced accounts payable service providers.

Myth 1: Accounts Payable Outsourcing Isn’t Secure

Since outsourcing involves sharing sensitive financial data with an external provider, security concerns are natural. Many businesses fear that outsourced providers could misuse payment information, create fake invoices, or sell data.

The Truth: Reputable outsourced financial providers employ professionals trained in spotting fraudulent activities and identifying potentially harmful transactions. They work as your frontline defence, using their expertise to detect tampering and other irregularities. Many third-party providers, like us, adhere to strict global compliance regulations, saving you the cost and hassle of in-house training while keeping your financial practices secure and compliant.

Myth 2: Outsourcing Is Expensive

It is common to assume that AP outsourcing has a high price tag that small or medium-sized businesses can’t afford.

The Truth: With an in-house team, you face expenses beyond their salaries, including benefits, insurance, and payroll taxes. Accounts payable outsourcing eliminates these additional costs. Many providers offer flexible hourly billing, so you only pay for hours worked.

Myth 3: Outsourcing Is Only Suitable for Large Companies

People often associate outsourcing with large corporations and assume that small businesses don’t have the resources or volume of work to justify it.

The Truth: Outsourcing accounts payable can benefit any business, whether small, medium, or large. You don’t need to handle millions of dollars to make outsourcing cost-effective. By paying an expert as needed, smaller businesses avoid the costs and commitments of hiring full-time employees. Thus, outsourcing allows companies of all sizes to optimize their financial processes without draining their resources.

Myth 4: Outsourcing Will Take More Time

Some believe outsourcing creates delays and complicates processes that should run smoothly. Managing accounts payable in-house seems like it would ensure faster completion and greater control.

The Truth: Outsourcing often speeds up processes. Third-party experts handle your accounts payable tasks exclusively, without the distraction of other responsibilities such as payroll processing, financial reporting, budgeting, or client communications that an in-house team might have. This focus allows for efficient, error-free work. With secure file-sharing platforms, invoices and documents can be shared instantly with your outsourced team, ensuring efficient as well as timely processing. Plus, outsourcing allows you to free up internal resources such as financial staff and office space to focus on tasks that require immediate attention.

Myth 5: I Can Do the Bookkeeping Better Myself

For many business owners, managing all aspects of their business seems essential to maintaining control. If you have accounting and bookkeeping experience, you may feel that no one can handle your bookkeeping as well as you can.

The Truth: Bookkeeping can be a burden when combined with running a business, detracting from your ability to focus on other crucial areas such as strategic planning, customer relationship management and employee management. A professional outsourcing provider brings specialized skills to complete tasks accurately and efficiently. They stay updated on compliance laws and financial regulations, reducing the likelihood of errors. Outsourcing doesn’t diminish your control; instead, it lets you focus on the strategic aspects of your business while experts handle the time-consuming bookkeeping details.

Myth 6: It’s Difficult to Find the Right Accounts Payable Partner

Another common misconception is that finding a reliable outsourcing partner who understands and caters to your needs is challenging.

The Truth: With numerous options available today, finding an experienced accounts payable provider is simpler than ever. For example, companies like us offer comprehensive solutions for handling procurement and accounts payable tasks in diverse sectors, from retail to healthcare. We generate clear reports, simplifying your monitoring processes and helping you make informed adjustments to your financial strategies. By selecting a trusted provider, you can confidently outsource your accounts payable, knowing you are in safe hands.

Myth 7: Outsourcing Leads to Poor Vendor Relationships

With a third party handling payments and invoices, there’s a fear that communication with vendors may become strained, impacting the quality of vendor relationships.

The Truth: Reputable accounts payable outsourcing providers are skilled in vendor management and understand the importance of clear, timely communication. Their systems are designed to ensure invoices are paid on time, which enhances vendor satisfaction and fosters stronger relationships. Outsourcing providers often offer customized approaches for vendor communication, such as automated reminders for due payments or inquiries, ensuring that vendors stay informed without causing delays. Moreover, since accounts payable providers work in specialized roles, they can help address vendor concerns quickly and professionally, improving the relationship rather than hindering it.

 
Now that we have busted some common misconceptions, you might feel more confident exploring accounts payable (AP) outsourcing as a viable option. Giving over these essential but time-intensive tasks to a specialized third-party provider can bring multiple advantages, including cost savings, enhanced security, reduced workload, and improved vendor relationships. Outsourcing your accounts payable offers the efficiency and expertise needed to streamline your financial processes, improve vendor satisfaction, and reduce the risk of costly errors. To learn more, contact Virtuous Accounting & Bookkeeping. We provide high-quality AP services across the GTA at competitive rates.