The accounts payable department of a company is one of its most important building blocks. However, it has been one of the slowest to adapt to change. However, this shift is now being accelerated due to the trends of automation taking flight amongst accountants across the world. Due to increasing automation, making invoices becomes more accessible and easier to manage. It helps optimize payments and makes sure that minimal human errors occur.
accounts payable workflows
This article will explore what accounts payable teams are, how they are made, and how they make accounts payable more efficient. Read on ahead to find out.
You can reduce the size of your teams
AP automation can help you reduce the size of the accounts payable teams. When you automate the tasks, less human intervention exists, and a lesser chance of human error exists. This is an excellent advantage for the company you are working for because you might see duplicate entries if purely manual work is being done. Due to duplicate entries, a company can experience losses of up to $15 million, which is not an amount to be scoffed at. Digitising your accounts payable means increasing the number of vendors but not the number of people working in the AP department. This is the meaning of making your AP department more efficient.
All these processes also help you bill more invoices than you usually do. Getting more invoices means that more payments are made. This, in turn, makes sure that your company is earning profit in droves.
Less time on data entry and reconciliation
Data entry is one of the most tedious tasks you can ever face as an accountant. Just as it sounds, it involves manually inputting the data into a system. This task can get monotonous and boring to the extreme. However, automating this process, the AP workflow has excellent advantages. Automating the workflow means that all the values can be put in automatically, and all you need to verify the data.
Another part of an accountant’s job that is made more accessible by automation is data reconciliation. What does that mean? It means the reporting of the payments or any form of transaction that has taken place. When this process is automated, the verification of invoices becomes more straightforward, and so does your life as an accountant. This is why making sure that your AP workflow is automated is one of the most important aspects of any business.
Make more payments more efficiently
Payments are much more efficient when the process is automated. You don’t need to worry about the invoices that have to be reported as paid. Why is it so? That is because the computer handles those. Making payments efficiently is very important. It builds a sense of trust between you and your vendor and ensures there is no chance of fraud. To do so, automating your AP workflow is the best way.
What does AP automation do to make the system so efficient? First of all, it makes sure that all transactions are end-to-end encrypted. This means that other than the sender and the receiver, nobody else will have any idea about the details of the transaction. Another advantage is that due to the highly intuitive nature of the workflow, there will be absolutely no margin of error. As a result, no mistakes or redundancy of the invoices benefit the company significantly.
Help you use corporate credit cards
Corporate credit cards are risky. They are very prone to fraud and can cause your company a lot of losses if misused. However, you might be asking, why use it? One significant advantage of using a corporate credit card is getting discounts using them. These discounts may not seem much at first, but when you get discounts of up to 20% on bulk purchases, these transactions become valuable for every company. Automation helps and makes this process of availing of discounts much easier.
When you are using an automated system, it knows how secure a transaction is by running it through some software. It can ensure the safety of the transaction ID of a vendor by verifying it. Hence, going through this process becomes extremely easy and makes automation a must-have for companies.
Conclusion
In conclusion, ensuring that you have automated your AP workflow is very important. Automation doesn’t just make your systems more efficient; it helps you earn more too. It is a way to ensure the safety of your transactions while also ensuring that everything is done on time. This makes automation one of the most important, if not the most important, tasks to be done with your AP workflow. Hopefully, you could convince yourself of the same after reading this article.
Cryptocurrencies took over the market around five years ago, and since then, popularity has never declined. On the contrary, more and more people are looking into ways to invest in cryptocurrencies. Many companies and individuals on top of the business industries started showing support for these new currencies with no third parties by accepting payment in the form of cryptocurrencies and investing in them.
There are many options to choose from, but Bitcoin and Ethereum are the leading cryptocurrencies that everyone has their eyes on. Although cryptocurrencies are significant as a form of payment for everyday products and services, can they be used to pay employees? Well, that is what we are here to discuss today. However, before answering the question if it is viable, we first need to clear the legal grounds for it to be an option. So, let’s see if paying in cryptocurrencies is a viable option.
The legal grounds
Many government officials have shown interest in paying crypto to employees in a legal deal. However, as of now, most states do not allow employees to be paid in crypto. Instead, they are only allowed to pay employees in U.S. currency or its equivalent.
FLSA, i.e., The Fair Labor Standards Act, governs most public and private employment in the United States. The main requirement of the FLSA is “Payment of the prescribed wages, including overtime compensation, in cash or negotiable instrument payable at par.” Apart from some exceptions, employers are left with two options that are cash or negotiable instruments, “payable at par.”
The Department of Labor, i.e., DOL provides a clear definition of what can be considered a negotiable instrument payable at par. The DOL allows employers to pay employees in foreign currency and U.S. dollars, as long as it satisfies the minimum salary requirement of the FLSA’s executive, administrative and professional exemption.
The foreign currency is initially converted into U.S. dollars, and if it matches the FLSA threshold, only then can you pay someone with foreign currency. A similar concept can be used for paying employees in crypto. However, the DOL and courts have yet to give their opinion on whether cryptocurrencies can be considered a form of foreign currency. Hence, the situation is a little ambiguous. Therefore, employers need to be cautious of the case if they are trying to adopt cryptocurrency as a payment to their employees.
How does crypto’s volatility affect the situation?
While some people will be in favor of receiving crypto as a currency, as they see potential in that currency, most experts believe that bitcoin will rise to $100,000 in the near future. If you are being paid in bitcoin, then there is no harm, as you could see that payment as a potential investment for the future.
On the other hand, you could see the payment in crypto as a complete facade. As most crypto currencies’ prices can’t be predicted, you can see a considerable dip in prices the next day you are paid. This might result in employees lashing out at the company. In addition, other risks could be taken into account, and employees could feel cheated in receiving payment in crypto.
If you see it from an employer’s perspective, employers could use cryptocurrency’s volatile nature to violate the minimum wage and overtime laws. Minimum wages can be termed as the specific standards of exactly how much employees must be paid for their work. If employers fail to pay the requisite salary, they can face misclassification claims. These claims could include anything from unpaid overtime to potential fines.
The volatility of the cryptocurrency could lead to the violation of these rights unintentionally. For example, if there is a drastic change in the currency’s price, the amount could be less than the required amount suggested by the wage-and-hour law.
Will it ever be viable?
Although most governments are not into cryptocurrencies right now, the market has already adopted these digital currencies into the system. As most aspects of life are being converted into virtual space, cryptocurrency will only increase its influence in the future. If it is not viable now, it surely will be in the near future.
If you want to adopt the system right now, you may want to give the actual payments in U.S. currency and then provide the option for your employees if they’re going to convert them into cryptocurrency or not.
Conclusion
Cryptocurrency is still new territory, and if you are stepping into it as an employer, you need to keep yourself updated. Keep in check all the changes in the law regarding payroll practices and the acceptance of cryptocurrency as a foreign currency. There may also be other legal problems while using cryptocurrency to pay employees not mentioned here. Hence you should also consult an expert before adopting the system to save yourself from future issues.
An organization sustains itself by receiving money for its goods and services while spending on its ability to produce those goods. Accounts payable and receivable is a concept that is the same thing but has more layers. If you are a business, then accounts receivable and accounts payable are something you should add to your knowledge.
Almost all lenders and potential investors look at accounts payable and account receivables to judge the company’s situation. If they found them in a good equilibrium, it is good news for you. If not, then not so much. Today we’ll be telling you all there is to know about these concepts and how you can effectively manage these to maintain the stability of your business. Here’s everything you need to know about accounts payable and receivable.
What essentially is Accounts Payable (AP)?
Accounts payable (AP) is the amount you or your company owes to its suppliers or other creditors at a basic level. If your organization made a hefty investment, its payment might be considered part of accounts payable. Although accounts payable do not include payroll or long-term debt like a mortgage, it does consider expenses covering those long-term debts.
For example, if you buy an expensive smartphone on EMI, i.e., equated monthly installment, its total cost won’t be a part of accounts payable. However, the amount you pay each month will be considered in AP.
Receiving an invoice based on payment terms agreed to by both parties becomes what we record as account payable. The finance team of the company gets this bill for goods and services. They then record it as a journal entry and post it to the general ledger as an expense. As mentioned, accounts payable cover the expenditure that your company is making. However, the balance sheet shows only the total amount of accounts payable and not individual transactions.
● Characteristics of AP departments
After the payment has been done as per the contract terms and an authorized approver confirms this, the accounting records the expense as paid. AP departments are a crucial part of an organization and are responsible for processing expense reports and invoices and ensuring that payments are being issued on time.
A skilled AP team helps your company maintain a positive supplier relationship by keeping everything from updating vendor information to paying the bills on time. They also look for payment terms that favor the company and constantly hunt for discounts that save the company money.
● Two ways to record Accounts Payable
Companies can use the two most common ways to record accounts payable: accrual or cash-basis accounting. Accrual accounting allows finance teams to make unpaid expenses act as placeholders for cash events. On the other hand, cash basis accounting will enable companies to record the costs after paying the suppliers.
Accounts Receivable (AR) explained
Accounts receivable can be considered as the opposite of accounts payable. They are the funds that customers owe your company, for example, credits for products or services that your company provides. The total value of accounts receivable is also available on a balance sheet. Therefore, they are termed “current assets” on the balance sheets.
As the term might suggest, accounts receivable include all invoices that your client owes for items or services performed for them. Often, vendors tend to bill customers after providing services or products. This also happens when a contract between the two parties is signed and mutually agreed on terms. Generally, customers agree to pay a net 30, i.e.; they pay within 30 days. Net 60 and net 90 are also some available options.
● Accounts Receivable team
After the company delivers the goods or services promised to the client, the AR(accounts receivable) team sends the customer invoices and records the amount as account receivable. The team shifts the payment from receivable to deposit after the client has paid according to the contract. After that, the amount is no longer receivable. However, if customers fail to pay on time, the team must send a dunning letter and the original invoice with some late fees, if any.
● How Accounts Receivable are recorded
Accrual accounting makes it so that your receivable balance is termed under current assets. After invoices are paid, the appropriate liabilities accounts are credited by finance, and they also debit accounts receivable to account for the payment.
Conclusion
If we see it from one person’s perspective, every invoice that is made is payable for one party and receivable for another party. Both are recorded in the general ledger, one as a liability and the other as an asset. The company’s financial health depends directly on the status of these two.
Oracle is software that is very necessary to maintain a database for everyone. It has recently launched an extension, a low-code development platform that is cloud-based and can be managed easily. The users of Oracle APEX are often business analysts and IT-savvy people who want to create applications without asking for help from IT support. These are new classes of developers who are supported by this program; this is good for the entire community as it promotes the development of software via non-professional coders and helps expand people’s knowledge.
This article is a comprehensive guide on Oracle APEX, how you can use it, and its benefits.
What is Oracle APEX?
First of all, before understanding what APEX is, we need first to understand what Oracle is. Oracle is a DBMS, i.e., a database management system, enabling the user to input, manipulate, and find various forms of data into a database system. These systems can then be accessed through queries; these queries are often taken through another software by the name of SQL. SQL is useful software, even when you are using APEX. This brings us back to our original question, what is oracle APEX?
Oracle APEX is a software where you can develop your software while not knowing much about coding itself. It is a myth that you need to be a professional coder to make a good quality program, especially when you have an application like APEX to help you out. It also gives a faster response time when you make a program, unlike other software, which is slow to compile.
This puts APEX over other compiling software and helps you make programs quickly. Another critical factor that puts APEX above other software is that it can be well integrated with SQL. SQL allows you to get queries swiftly done and helps you make your software much more accessible.
How can you use APEX?
The APEX software is relatively easy to use. Here are a few steps which you need to keep in mind while using this software:
● First of all, make sure to create a workspace for yourself and your team. APEX is software that can be used by multiple users, giving it another edge over other software that performs the same function. This software usually is single-user software, but APEX is open-source software that multiple users can use simultaneously.
● There are various features to view the table and data you have inputted. You need to enter the queries, and voila, you get your answer, your data, and your tables. This is a massive advantage over other software; their lag time is much greater than APEX.
● You can create applications via this software. These applications can be desktop applications, web sheet applications, or mobile applications. What is even better is that these applications don’t require much coding. Being less coding-intensive means that you can devote time to making it look good and improving your user interface and user experience.
These were some uses of Oracle APEX that any user can do without being too involved with the IT department. Now, let’s look at the benefits of Oracle APEX.
Benefits of APEX
There are various benefits of using Oracle APEX over using other such software. Some of them are listed here:
● First, it is low-code development software. This software provides a guided, step-by-step procedure, and it is a browser-based, graph-based software that helps you make applications at an accelerated rate.
● It is a very responsive software, and as a cherry on top, the applications made in it are pretty responsive. You can include charts, graphs, and reports in your application to complete the work seamlessly.
● It is software that helps make applications fast. Not just that, you can also make changes in the applications seamlessly without causing any process complicated.
● You can also build apps with confidence, and it helps you calculate the statistics of your application accurately. This allows a lot during the development cycle of the application you are making.
● Finally, it helps make modern applications for modern times. This means that it is compatible with most file formats that devices nowadays support.
Conclusion
In conclusion, Oracle APEX is a handy software that helps you create applications and tables, manage data, and make sure that every aspect of your application is covered. Therefore, it is essential to know how it works and how you can take complete advantage of this software. Each part and every step is necessary; it helps you make beautiful applications without coding-intensive knowledge and helps you manage data. Hopefully, this article served as a guide to your introduction to Oracle APEX, and you’ll find beautiful applications for the software.
