Outsourcing Accounts Payable: Examples & Best Companies

In the busy business world, accounts payable often don’t get the attention it deserves. While it might seem simple, it eats up a lot more time and resources than you’d expect. Think about how often it ties up your team with routine checks, error fixes, and approvals. Outsourcing accounts payable provides the perfect solution to keep everything on track – without the usual hassle.

In this article, we’ll explore the ins and outs of accounts payable outsourcing, provide real-world examples, and introduce you to some of the top companies in the industry.

5 Outsourcing Accounts Payable Examples To Look Into

Here are 5 practical examples of outsourcing accounts payable that can make a real difference for your business.

1. PepsiCo (Food & Beverages)

PepsiCo, founded in 1965, is a global food and beverage leader. With an annual revenue of over $86 billion, it operates in 200+ countries and owns major brands like Pepsi, Lay’s, Gatorade, Tropicana, and Quaker. The company has a portfolio of 23 brands generating over $1 billion each in annual sales. Headquartered in Purchase, New York, PepsiCo employs around 300,000 people worldwide.

Why They Outsourced Accounts Payable

PepsiCo outsourced its Accounts Payable (AP) to address many challenges: they wanted to simplify payment processing, enhance compliance, and leverage automation to reduce costs. Like many large firms, PepsiCo’s AP process had inefficiencies because of high transaction volume and the complexity of vendor contracts. 

How They Did It

• PepsiCo began with Celonis to identify bottlenecks in their AP workflows.
• Applied robotic process automation (RPA) to handle routine AP tasks to reduce manual work and errors.
• Standardized invoice processing to enforce consistent compliance rules across its global operations.
• Integrated AP systems with analytics to monitor real-time metrics on payment status and identify high-value vendors.
• Tools like Celonis’ “fuzzy matching” flagged invoice splits to prevent circumvention of approval limits.

Result

Through these changes, PepsiCo saved up to 1,000 hours a year in manual AP tasks alone. Plus, their AP automation initiatives freed up millions of dollars in working capital by speeding up payment processing times and cutting down on rejected invoices and late fees.

2. McDonald’s (Fast-Food Industry)

McDonald’s, founded in 1940, is a global fast-food chain with over 40,000 locations in 100+ countries. It serves millions daily with an emphasis on affordability and speed. The company generates around $23 billion annually, with 90% of its restaurants operated by franchisees. Headquartered in Chicago, McDonald’s is also a major employer with 2 million+ workers across franchises worldwide.

Why They Outsourced Accounts Payable

McDonald’s decided to outsource its AP function for 2 main reasons: cost reduction and efficiency. Through outsourcing, they could cut down on the costs of managing invoices and payments. McDonald’s could also ensure faster processing, which is crucial given their large network of suppliers and the high transaction volume that requires accurate and timely payments to maintain operations and vendor relationships.

How They Did It

• Partnered with a trusted outsourcing provider specializing in accounts payable.
• Transitioned routine tasks like invoice processing, payment scheduling, and reconciliation to the provider.
• Implemented cloud-based AP automation tools to facilitate seamless integration and real-time updates.

Result

McDonald’s reported improvements in efficiency and major cost savings. While exact figures are proprietary, similar outsourcing arrangements result in a cost reduction of around 30-50% for large corporations. This is primarily because of lower administrative costs and the avoidance of late fees through faster invoice processing. 

3. Walmart (Retail)

Walmart, headquartered in Bentonville, Arkansas, is a global retail giant with over 10,000 stores worldwide and serves 240 million customers weekly. In 2024, Walmart’s accounts payable totaled around $56.7 billion, reflecting its vast network of supplier and vendor transactions. 

With a revenue of over $611 billion in 2023, Walmart continually seeks ways to streamline its financial processes to maintain its low-price competitive edge and reduce overheads.

Why They Outsourced Accounts Payable

Walmart outsourced accounts payable to reduce costs, improve process accuracy, and gain efficiency by leveraging specialized expertise. This move let Walmart focus more on core business activities while still maintaining reliable supplier payment processes. 

Outsourcing also allowed them to better manage data security and compliance, as their partner firms employed robust security protocols and automation to mitigate risks and maintain regulatory standards.

How They Did It

• Partnered with a specialized outsourcing firm experienced in accounts payable processes.
• Implemented automation technology to streamline invoice processing and payment workflows.
• Integrated advanced data security measures to protect sensitive vendor and transaction data.
• Monitored real-time data for invoice statuses to enhance transparency with suppliers.
• Standardized processes across locations to improve efficiency and vendor relationships globally.

Result

Outsourcing AP led to a significant reduction in processing costs for Walmart, estimated at around 20-30% annually. Plus, invoice processing times improved by approximately 50%. This improved cash flow management and strengthened supplier relationships because of more timely payments.

4. General Electric (Manufacturing & Technology)

General Electric (GE), one of the world’s largest conglomerates, operates across different industries like aviation, energy, healthcare, and finance. It has over 168,000 employees and revenues of approximately $76 billion in recent years.

Why They Outsourced Accounts Payable

Given the complexity of its global operations, managing AP internally posed challenges, including high operational costs, time-consuming manual tasks, and the need for enhanced compliance across jurisdictions. Outsourcing AP helped GE benefit from specialized technology for automation and access the latest compliance practices without handling it all in-house

How They Did It

• Partnered with specialized BPO providers to manage AP processing and compliance.
• Set up stringent controls with the BPO for consistent compliance monitoring and fraud prevention.
• Established a centralized AP hub to manage global operations efficiently while maintaining visibility.
• Ensured real-time reporting and data analytics to keep GE’s finance teams updated and improve decision-making processes.

Result

By centralizing AP and integrating automation, GE reduced processing costs by approximately 30% and improved invoice processing times. As a result, vendor payments were made on time and cash flow management improved. Compliance was enhanced, and the company reduced operational risks of manual AP processes, which aligned with GE’s broader digital transformation goals

5. Pfizer (Healthcare & Pharmaceutical)

Pfizer, founded in 1849, is a leading global pharmaceutical company headquartered in New York. It generates around $100 billion annually. Pfizer gained worldwide attention with its COVID-19 vaccine which has been administered to millions globally. With a workforce of over 83,000, the company focuses on innovation in oncology, immunology, and cardiovascular health.

Why They Outsourced Accounts Payable

Pfizer outsourced its accounts payable to streamline financial operations, especially with the increased complexity and transactional volume post-pandemic. This would help Pfizer maintain focus on its core business, which includes substantial investments in R&D and partnerships like those with BioNTech for vaccine development.

How They Did It

• Selected a specialized vendor experienced with AP processes for large-scale pharma operations.
• Shifted transactional AP tasks to an automated platform for centralizing data management.
• Implemented robust integration with their internal ERP to keep reporting synchronized.
• Established KPIs with the vendor for on-time payment processing and error reduction.
• Set up a continuous review mechanism to monitor AP performance against financial targets.

Result

With AP outsourcing, Pfizer improved efficiency and freed up resources for innovation and R&D. This contributed to a record-setting year with 92% operational revenue growth and $24 billion in Q4 alone. This strategy has allowed Pfizer to continue expanding its impact on a global scale, particularly in vaccine distribution​.

5 Most-Trusted Companies To Outsource Accounts Payable

Here are the 5 best companies that are known for providing top-notch accounts payable outsourcing services.

I. Genius

Genius is a specialized headhunting agency that connects you with top candidates for outsourcing accounts payable. We take a tailored approach to recruitment and use a thorough screening process, which includes assessing candidates’ technical skills, like proficiency in accounting software and knowledge of financial regulations.

Genius can help you achieve up to an 80% cost saving compared to traditional hiring methods. Plus, we offer a 6-month talent guarantee. If a candidate doesn’t meet your expectations within that time, they’ll help you find a replacement at no extra cost.

One of the standout features of Genius is our on-ground sourcing network. We have connections across various locations, allowing us to tap into local talent pools. This means you get qualified candidates who understand the local market nuances. 

You can meet potential hires without any financial commitment upfront. This approach lets you evaluate candidates thoroughly before making a decision, ensuring you find the right fit without any pressure.

Employees: 25

Revenue: $1M – $2M

Year Founded: 2019

Pricing: 

• 25% fee of candidate’s first-year salary, one-time

Time to Hire: 1-2 weeks

Industry Focus:

• Sales & Marketing
• IT, Data, & Engineering
• Finance & Accounting

Core Services Offered:

• Accounts Payable Specialists
• Accounts Reconciliation Support
• Payment Processing Assistance
• Compliance and Audit Assistance

II. Paro

Paro is one of the most renowned accounts payable outsourcing companies that connects you with the top 2% of accounting professionals. This means you’re getting access to some of the best talent, ready to tackle your accounts payable needs. They use proprietary AI matching technology to identify candidates who perfectly fit your requirements, cutting down the time it takes to find the right person. 

In fact, Paro can deliver candidates 20 times faster than traditional hiring methods. It operates across 60+ industries and covers 250+ skill sets. This breadth means they have a diverse pool of talent to draw from, ensuring you find someone who has the right experience and understands the specific challenges and nuances of your industry.

Employees: 239

Revenue: $10M – $20M

Year Founded: 2015

Pricing: 25% of the candidate’s first-year salary

Time to Hire: 1-2 weeks

Industry Focus:

• Accounting
• Financial Analysis
• CFO Advisory

Core Services Offered:

• Accounts Payable Management
• Invoice Processing Automation
• Expense Reporting and Analysis
• Financial Reporting and Insights

III. Fully Accountable

Fully Accountable provides a comprehensive financial management solution for AP outsourcing. They have a team of experienced CPAs and specialists who understand the nuances of accounting. Their expertise ensures that your accounts payable processes are handled efficiently and accurately. It also provides you with financial reports on a daily, weekly, and monthly basis for a clear view of your financial health

Fully Accountable has earned a spot on the Inc. 5000 list, highlighting its rapid growth and commitment to client satisfaction. They will provide you with a detail-oriented dedicated team. So you can expect a hands-on approach where every aspect of your accounts payable is meticulously managed. 

Employees: 36

Revenue: $2.5M – $5M

Year Founded: 2014

Pricing:

• Starts at $2,500 per hire

Time to Hire: 3 months 

Industry Focus:

• Accounting
• Finance
• eCommerce
• SaaS

Core Services Offered:

• Vendor Payment Coordination
• Expense Tracking and Reporting
• Financial Reporting Services
• Cash Flow Analysis

IV. Toptal

Toptal is known for its stringent selection process, which means you’re connecting with the top 3% of candidates in the field. What sets Toptal apart is it sources candidates from over 140 countries. So whether you need someone familiar with international accounting standards or specific regional regulations, Toptal has the expert for you.

Toptal is trusted by around 25,000 businesses, which shows its reliability and effectiveness in matching companies with the right talent. Their pool of more than 20,000 candidates means you can find accounts payable specialists who have worked in various industries, bringing a wealth of knowledge that can improve your financial processes.

Employees: 6,155

Revenue: 500M – $1B

Year Founded: 2010

Pricing:

• $79 per month

Time to Hire: 48 hours 

Industry Focus:

• Finance
• Design
• Software Development

Core Services Offered:

• Accounts Payable Specialists
• Vendor Management Services
• Expense Report Management
• Financial Reconciliation Support

V. Wishup

Wishup specializes in connecting businesses with a diverse range of talent. Having served over 900 clients across 50+ industries, they understand the specific needs of different sectors. Wishup has a pool of 1500+ pre-vetted experts, which means you can be confident that the candidates you’re considering have been thoroughly assessed. 

Their evaluation process goes beyond just accounting skills; they look at aptitude, communication, English proficiency, personality traits, and cultural fit. Wishup also offers a dedicated app that provides superior team management on the go. This tool can help you stay connected with your outsourced accounts payable team, regardless of where everyone is located.

Employees: 352

Revenue: $20M – $50M

Year Founded: 2015

Pricing:

• Starts at $999 per month

Time to Hire: 48 hours 

Industry Focus:

• Healthcare
• Startups
• eCommerce

Core Services Offered:

• Expense Approval Processes
• Payment Processing Assistance
• Financial Record Maintenance
• Accounts Reconciliation Support

When To Outsource Accounts Payable

Knowing when to outsource accounts payable can make a big difference in your company’s efficiency. Let’s break down some specific situations where outsourcing is the right move.  

A. Seasonal Invoice Spikes Overwhelm Staff

If your business experiences seasonal spikes in invoicing, you may find your current team struggling to keep up. This could happen during peak sales periods or specific times of the year when your supply chain is especially busy. When invoices start piling up, mistakes can happen – missed payments, data entry errors, or late approvals. 

If your staff is feeling overwhelmed and stressed, it might be a sign that outsourcing could help manage the workload during those busy times. You can bring in an external team that’s experienced in handling high volumes of invoices to maintain accuracy and efficiency without overburdening your existing staff.

B. Persistent Late Payments Causing Supplier Penalties

Another indicator that it is time to consider outsourcing is if your company is facing constant late payments to suppliers. It not only damages your relationships with vendors but can also result in penalties or increased costs. 

If your team is struggling to manage payment schedules, it could be a sign that the process needs a dedicated approach. An outsourced accounts payable team can bring streamlined processes, automated reminders, and focused attention to ensure that your payments are made on time. 

C. High Turnover In AP Roles

High turnover rates in your AP department can signal deeper issues within your organization. Constant turnover not only disrupts operations but also increases training costs and reduces team cohesion.  

If you frequently find yourself hiring and training new staff for these roles, consider why this is happening. Is the workload unsustainable? Are there systemic inefficiencies causing frustration? When it becomes clear that retaining talent in this area is a challenge, outsourcing provides a more stable solution.

D. Frequent Errors In Invoice Processing Or Matching

If your team is consistently making errors in invoice processing or matching, it’s a clear sign that something isn’t working. Perhaps invoices are getting lost, data entry mistakes are becoming the norm, or mismatches between purchase orders and invoices are causing confusion and delays. Each error not only costs time but can also damage your relationships with suppliers and impact your cash flow. 

If you find that your current processes aren’t robust enough to handle the volume or complexity of your invoices, consider bringing in external expertise. An outsourced accounts payable team that specializes in invoice management can bring more precision and accountability to your operations.

E. Rapid Business Growth That Demands Scaling The AP Processes

Rapid business growth is exciting, but it comes with its own set of challenges, particularly in accounts payable. As sales increase, so does the volume of invoices and payments to manage. If you’re finding it difficult to keep pace with your expanding operations—perhaps your team is overwhelmed or the existing systems can’t handle the influx of work—it’s worth analyzing your current AP processes. 

A growing business needs scalable solutions to avoid bottlenecks that can slow down financial operations. When your accounts payable process becomes a constraint on growth, bring in an outsourced team that can quickly scale with your business needs.

How Outsourcing Accounts Payable Process Works

Understanding how the accounts payable outsourcing process works is essential for making a smooth transition. Let’s discuss this in detail.

i. Conduct A Detailed Consultation & Needs Assessment

This is your chance for you to sit down with potential outsourcing partners and discuss your unique requirements. Here’s what you should focus on during this phase:

• Document your existing AP processes, including invoice receipt, approval workflows, and payment methods. This helps identify bottlenecks.
• Be candid about challenges like late payments, high error rates, or staff turnover. The more transparent you are, the better solutions the provider can offer.
• Clearly articulate what you hope to achieve through outsourcing, like reducing processing time, improving accuracy, or lowering costs.
• Provide data on seasonal fluctuations in invoice volume to help the provider understand your capacity needs throughout the year.
• Discuss your current software and tools, including preferences for integration with the outsourcing provider’s systems.
• Identify industry-specific compliance standards your provider needs to adhere to, ensuring they understand the regulations that apply to your business.

ii. Select The Right AP Outsourcing Provider

Once you’ve assessed your needs, it’s time to select the right outsourcing provider. This decision is crucial, as it impacts how effectively your accounts payable will be managed. Here’s what to focus on when shortlisting outsourced accounts payable services:

• Look for a provider with experience in your specific industry, as they’ll be more familiar with your challenges and compliance needs.
• Make sure the provider can adapt their services to your unique requirements, whether that’s handling international invoices or managing multiple currencies.
• Confirm that their technology can integrate with your current systems to facilitate seamless data transfer and reduce disruption.
• Inquire about their data security protocols, including encryption and access controls, to protect your sensitive financial information.
• Evaluate the level of support you can expect, including the availability of dedicated account managers and response times for inquiries.
• Ask for examples of similar businesses they worked with and the results achieved. This will give you insight into their effectiveness and reliability.
• Agree on how often you’ll communicate and in what format (meetings, reports, etc.), ensuring there’s a clear line of communication throughout the partnership.

iii. Negotiate & Finalize The Contract Agreement

Negotiating and finalizing the contract is a crucial step that lays the foundation for your partnership. Here are specific points to consider during this phase:

• Clearly outline the services the provider will handle, like invoice processing, payment approvals, and reporting. This helps prevent misunderstandings later on.
• Establish KPIs to measure success, like invoice processing time, accuracy rates, and payment timeliness. These metrics will hold the provider accountable.
• Understand the pricing model—whether it’s per transaction, a flat fee, or based on volume. Make sure it aligns with your budget and expected invoice flow.
• Protect your sensitive financial information by incorporating confidentiality agreements. This is crucial for safeguarding your data during the outsourcing process.
• Clearly state the conditions under which either party can terminate the contract, including notice periods and penalties for early termination. This protects you if the partnership isn’t working out.
• Determine how disputes will be resolved, whether through mediation, arbitration, or another method. Having a plan in place can save time and money in case conflicts arise.
• Make sure the contract addresses compliance with industry regulations and legal obligations that apply to your business and the provider.

iv. Plan & Execute Data Migration With System Compatibility Checks

Once the contract is finalized, the next step involves planning and executing data migration. Here’s how to approach this phase effectively:

• Develop a comprehensive plan detailing what data will be migrated, including invoices, vendor information, and payment history. This roadmap will guide the process and keep everything organized.
• Before migrating, confirm that your systems and the provider’s technology are compatible. This involves testing APIs or integration points for smooth data flow.
• Set a clear timeline for the migration process, including milestones and deadlines. This helps manage expectations and keeps the project on track.
• Before starting the migration, create backups of all current data to prevent loss during the transition. This step is critical for maintaining historical records.
• After migration, verify that the data is transferred correctly. Check for discrepancies in invoice amounts, vendor details, and payment history to ensure accuracy.
• Arrange for training sessions with the outsourcing provider to familiarize your team with the new system. This will enhance their efficiency and help them adapt quickly.
• Make sure there’s a support plan in place for issues that arise during or after the migration. This could include access to helpdesk services or dedicated support personnel.

v. Customize Processes & Design Efficient Workflows

Customizing processes and designing efficient workflows is crucial for aligning the outsourcing provider’s operations with your business needs. Here’s how to approach this step:

• Start by documenting your existing AP workflows in detail. Identify each step, from invoice receipt to payment, and note any challenges you face.
• Work closely with the provider to tailor workflows that fit your organization’s requirements. This collaboration helps ensure that the provider understands your expectations.
• Define clear approval processes, including who needs to authorize payments and any thresholds for different amounts. This will streamline decision-making and reduce delays.
• Discuss the technology tools that will be used for processing invoices and payments. Make sure these tools are user-friendly and meet your team’s needs for ease of access and reporting.
• Set up effective communication methods between your team and the provider. This could include regular check-ins, a shared project management platform, or a dedicated contact person for urgent inquiries.
• Develop comprehensive documentation outlining the customized processes and workflows. This serves as a reference for both your team and the provider, ensuring consistency in operations.
• Clearly communicate the performance standards you expect from the provider, including turnaround times for invoice processing and reporting frequencies.

vi. Onboard & Train The Vendor Team 

Onboarding and training the vendor’s team is essential for ensuring they can effectively manage your accounts payable functions. Here’s how to make this process smooth and effective:

• Start with a meeting that includes both your team and the vendor’s representatives. This helps establish rapport and align everyone’s expectations from the start.
• Share key information about your company, including organizational structure, vendor relationships, and specific preferences. This context will help the vendor team understand your business better.
• If you use specific software for AP, arrange training sessions to familiarize the vendor team with your systems and processes. This ensures they can navigate your setup effectively.
• Provide insights into your current AP practices and what has worked well in the past. This helps the vendor team understand your expectations and adapt their processes accordingly.
• Set up a system for ongoing feedback during the training phase. Encourage the vendor team to ask questions and share concerns to clarify any uncertainties.
• During the initial onboarding period, closely monitor the vendor’s performance. This allows you to address any issues early on and make necessary adjustments.

vii. Conduct Periodic Reviews & Optimize For Efficiency

Regular reviews and optimization efforts are vital for maintaining a high-performing accounts payable operation. Here’s how to conduct these evaluations effectively:

• Set up periodic meetings (monthly or quarterly) to review the vendor’s performance against the established KPIs. This keeps everyone accountable and highlights areas for improvement.
• Examine each step of the AP process to identify bottlenecks or inefficiencies. Look for patterns that indicate recurring issues, like delayed approvals or payment processing.
• Encourage your internal team to provide feedback on their experiences with the vendor. They can offer valuable insights into how well the vendor is meeting your needs.
• Keep an eye on developments in the accounts payable field, including new technologies and best practices. This awareness can help you stay competitive and identify areas for improvement.
• Compare your AP performance metrics against industry standards to see how you stack up. This can help you identify specific areas for enhancement.
• Based on the insights gathered during reviews, work with the vendor to implement changes to improve efficiency and accuracy in the AP process.
• If you identify major inefficiencies or recurring issues, don’t hesitate to revisit your contract terms. Adjust service levels or expectations to achieve optimal performance.

5 Core Challenges When Outsourcing Accounts Payable + Easy Fixes

When outsourcing accounts payable processes, you’ll encounter several challenges that can disrupt your workflow and impact your revenue. Let’s discuss the 5 most specific challenges and see how you can overcome them.

a. Delays In Invoice Processing Due To Time Zone Differences

When you outsource your accounts payable, you may work with teams located in different time zones. 

This can cause delays in invoice processing. For instance, if your AP team in the U.S. needs approvals from a team in India, the difference in working hours can slow down the workflow. An invoice submitted late in your day may not get processed until the next business day on their end, which can create bottlenecks.

Here’s how you can tackle this challenge:

• Schedule regular meetings during overlapping hours to ensure timely communication and prompt approvals. This way, you can address urgent matters as they arise.
• Invest in automated systems for invoice processing that can operate round-the-clock. This allows for immediate data entry and can help mitigate delays, even when teams are offline.
• Set clear service level agreements (SLAs) with your outsourcing partner that define expected turnaround times for processing invoices.
• Create a real-time, shared dashboard where both teams can track the status of invoices and payments. This transparency promotes collaboration and reduces delays.
• Identify peak times for invoice submissions and communicate these to your outsourcing team in advance. This way, they can allocate more resources to handle the increased volume.

b. Data Security Risks With Third-Party Access To Financial Records

Outsourcing accounts payable services means sharing sensitive financial data with third parties. This can raise security concerns, especially if the provider doesn’t have robust security protocols in place. Data breaches can occur and expose your financial records to unauthorized parties.

Here’s how you can overcome this issue:

• Before engaging with an outsourcing partner, conduct a thorough security audit to assess their data protection measures. Ensure they follow industry standards and best practices.
• Make sure that sensitive data is encrypted during transmission and storage. This adds a layer of protection against unauthorized access.
• Grant access to financial records only to those who absolutely need it. This minimizes the risk of exposure and helps maintain tighter control over sensitive information.
• Provide regular security training for both your team and the outsourcing partner’s team. Keeping everyone informed about the latest security protocols and threats is essential.
• Regularly monitor access logs to track who is accessing sensitive data. This can help you detect unusual activity early and respond promptly.

c. Loss Of Control Over Payment Schedules & Cash Flow Timing

When you outsource accounts payable, you might feel like you’re relinquishing control over your payment schedules and cash flow timing. Depending on how your outsourcing partner manages their processes, you may find it challenging to keep track of payment deadlines, which can affect your financial planning.

Let’s see how you can manage this issue:

• Work with your outsourcing partner to create clear guidelines for payment schedules. Specify deadlines for payments to ensure everyone is on the same page.
• Invest in cash flow forecasting tools that integrate with your accounting system. These tools help you monitor cash flow in real-time and anticipate upcoming expenses.
• Schedule regular check-ins with your outsourcing partner to review payment schedules and discuss any upcoming financial obligations. This keeps everyone aligned.
• Develop a payment calendar that outlines all upcoming payments and deadlines. Share this calendar with your outsourcing partner to ensure they are aware of what’s due and when.
• Keep direct communication channels open with your outsourcing provider. This lets you address cash flow issues or payment concerns as they arise.

d. Inconsistent Quality Of Work & Errors In Invoice Entries

Inconsistencies in the quality of work often stem from a lack of standardized processes or inadequate training within the outsourcing team. For example, if your outsourcing provider doesn’t have robust guidelines for invoice entry, you might see errors like duplicate entries, incorrect amounts, or mismatched purchase orders. 

These issues can arise even with the best intentions—if the team handling your accounts payable isn’t fully versed in your company’s standards or procedures, mistakes can easily slip through the cracks.

Here’s how you can overcome this challenge:

• Create detailed SOPs for invoice processing. These should include clear guidelines on data entry, matching invoices to purchase orders, and approval workflows. 
• Schedule regular training sessions with your outsourcing team to keep them updated on your procedures and expectations. Consider refresher courses every few months, especially if there are changes in your processes.
• Establish a quality control process where a certain percentage of invoices are randomly selected for review each month. This helps catch errors before they become a bigger problem and reinforces the importance of accuracy among the team.
• Invest in automation tools that minimize human error by automatically matching invoices with purchase orders and flagging discrepancies. AP automation can significantly reduce the number of errors introduced during manual entry.

e. Hidden Fees & Cost Overruns That Affect Budget Control

Hidden fees can sneak up on you when outsourcing accounts payable. Providers might offer a seemingly competitive rate, but additional costs can arise from factors like extra transaction fees, costs for handling complex invoices, or charges for additional services not included in the original agreement. These unexpected expenses can disrupt your budget and make financial forecasting challenging.

Let’s discuss how you can handle this:

• Before signing any contracts, ask your outsourcing provider for a full breakdown of their pricing structure. This should include all potential fees and charges, so there are no surprises later on.
• Clearly define the scope of work in your contract. Specify what services are included in the base fee and what will incur additional charges. This helps set expectations and reduces the chances of misunderstandings.
• Set up a monthly review process to analyze invoices from your outsourcing provider. Compare the charges against your budget and contract terms to identify discrepancies or unexpected fees.
• Don’t hesitate to negotiate contract terms that benefit you. For instance, discuss caps on additional fees or seek agreements that limit costs for specific services, ensuring better budget control.
• If possible, explore providers that offer all-inclusive pricing models. These arrangements can simplify budgeting and give you a clearer understanding of your total costs upfront.

Conclusion

Outsourcing accounts payable has become a powerful strategy. However, the real catch here is to find a reliable partner who can ease things for you and let you focus more on growth and customer satisfaction instead of the repetitive tasks that come with managing accounts payable. 

Genius connects you with top-tier overseas professionals who can handle your account payable needs at 80% less. We offer a 6-month satisfaction guarantee and you can interview talent without any financial commitment until you successfully make a hire. Get in touch with us to get started. 

FAQs

What industries commonly outsource their accounts payable?

Many industries find outsourcing accounts payable beneficial. Retailers manage high transaction volumes, while manufacturers handle complex invoicing from multiple suppliers through outsourcing. Healthcare organizations rely on outsourcing to streamline invoice processing and comply with regulations. Technology firms often outsource to focus on core operations, and construction companies benefit from managing fluctuating workloads.

How much does it typically cost to outsource accounts payable?

For outsourcing accounts payable, you can pay $1 to $5 per invoice, depending on transaction complexity and volume. Annual costs generally range from $20,000 to $100,000. Factors like service level agreements and the provider’s location also impact pricing – offshore services may offer lower rates, while domestic providers might charge more for better communication and support.

How can I measure the success of my accounts payable outsourcing strategy?

To measure success, track KPIs like cost savings, invoice processing time, and error rates. Compare your current costs to what you spent in-house. Monitor how quickly invoices are processed and look for a reduction in errors. Additionally, gather feedback from suppliers on payment timeliness and satisfaction. Lastly, assess how well the outsourced team scales during peak times. These metrics will give you a clear picture of your outsourcing effectiveness.

What are the differences between full outsourcing and co-sourcing for accounts payable?

Full outsourcing means handing over complete control of your accounts payable to an external provider. They manage everything from invoice processing to payments, ideal for those wanting to reduce internal workload. On the other hand, co-sourcing involves collaborating with an outsourcing partner while retaining some internal oversight. Both teams share responsibilities, which provides greater control and flexibility.