Are you a business owner? If yes, do you have any idea of what are the ways that you can do to leverage your accounts payable that will result in the improvement of your working capital? You must know what these ways are so that you can maximize the growth of your business. If you want to know what these are, you can read the list below. Here is the list of the easy yet, effective ways of leveraging the accounts payable that will lead to the improvement of the working capital. OPT for Digital and Automatic One of the best ways that you can do in leveraging your accounts payable is to take advantage of the technology. It means that instead of using paper-based transactions, why not opt for digital and automatic records of the transaction. Not only that it will avoid disorder and confusion, but the records of transactions would also be systematic and organized. It is also the best solution for keeping and storing these important documents because you can track and monitor all of these. Also, you all know that with paper-based transactions, it means that you need to find for a place where you can store and keep all of these, and when the time that you need it, you need to search for these which is very tiresome to do and a waste of time. When you choose this solution, you can be assured that everything will be easy, fast, and efficient whether from recording transactions up to the main process itself. Do a Reassessment of its Current Processes You should know that with accounts payable it always involves some processes which include a selection of a vendor, the creation of contracts, the processes of procurement as well as the invoicing. With this, you must do a reassessment of these current processes so that you can improve and enhance each of these that will lead to the elevation of your working capital. You can read the list below to help you know the things that you can do in each of these processes. Select a Good Vendor The very important thing that you should do to improve this process of selecting vendors is that you have to sustain a good number of suitable and favorable suppliers. By doing this, you can be assured that your buying transactions will always be in favor of your needs. And to help you in choosing a good vendor is that first, whenever you select one, you have to make sure that all of the vital stakeholders of the business should always be involved so that you can share each other’s ideas on who is the best one that you can trust. Second, you have to do background checks and review the performance of each of the supplier you have which you will record in what do you called scorecard. You can use this scorecard to monitor and track the performance that they show and as a proof to claim for any violations of the agreement. With this, you can also have the chance to earn discounts from them that will benefit your business. Also, Read: AP Process Cost: A Critical Metric of Finance and Accounting. Record Accurate and Precise Data You should also consider the recording and maintaining of data. You have to make sure that all of the entries of data which are the terms of suppliers should be accurate and correct. Not doing this might lead to the disorder of the transaction such as mistaken payments, no chances for discounts, as well as interferences in supply. And for you to prevent this inconvenience, it is a must that all of the agreements and orders of purchase should be subjected to the system of accounts payable and purchasing. This data should always be continuously monitored and frequently updated in every change that might occur. Also, you need to make sure that the real and actual contract paper is placed in a secured facility for you to easily access it when you need it most. Re-evaluate the Contract Just like what you should do with the records of data, you also have to do always a re-evaluation of the contract between you and your suppliers. It includes checking the preciseness and completeness of each data entry and also the validity of each. By doing this, you can be assured that your suppliers meet the contract terms always. Organize the Process of Procurement To deal with the process of procurement, you can have the ability to create rules and regulations that everybody should follow. Also, you can monitor the accounts payable, establish accurate metrics, and when it comes to purchases of new products, you can also request for longer schedules of payment. With this, you can have many ways that you can do to overcome the challenging process of procurement. Read our article:Big Importance of Financial Planning for Companies Enhance the Process of Invoicing One of the best ways that you can do to enhance the process of your invoicing is that go to a digital and electronic system. With this kind of system, the process will become easy and fast which can save up a lot of your time. In spite of the efficient process, you can be assured that the entries of data are still accurate and precise. By doing this, you can make a difference in the status of your invoicing process. Leverage Your Analytics Aside from accounts payable, you should also consider the Days Payable Outstanding (DPO) which is a requisite in organizing the flow of your cash. You have to create a DPO analytics for you to monitor and track the schedule of payments. Gain the Interest Lastly, you have to find ways for you to gain the interests that might add up to your profit and income. To help you with that, you can negotiate with your bank about this matter. With all the information stated above, you now have the idea of what are the ways that you can do in leveraging your accounts payable. With this, you can be assured that this will lead to the improvement of your working capital. If you want to know more, you can ask a financial expert to help you. See Our Recommendations: Benefits of Procure to Pay (P2P) / Accounts Payable Outsourcing.