Entrepreneurs operating small businesses don’t give much importance to accounts payable. It doesn’t rank high on their list of priorities. However, they forget it is a critical component of their supply chain. These proprietors assume that all they need to do is pay their vendors on time. This is enough to keep their trading partners happy. Many of them explain that they have focused their attention on more vital areas of their organizations. These include marketing, production, finance, accounts receivable and customer service. However, many prominent industry experts say these owners are making a fatal mistake. They need to introduce and implement a proper strategy. Otherwise, they could end up facing severe liquidity problems. Before they know it, these businessmen could be facing a cash crunch. They may have to forgo lucrative opportunities.
Arnon Dror kodak How can entrepreneurs streamline their existing accounts payable process?
Arnon Dror is a popular financial specialist with more two decades of valuable experience under his belt. This MBA graduate has held many high-profile positions of authority in prominent corporate enterprises. This includes the office of Vice President (Finance) in US Channel Group, an American transnational company. His reputation of being a result-oriented person came during the Arnon Dror Kodak tenure. People who know him say he is well-versed in many diverse fields. These include business modeling, internal control, international taxation, supply chain optimization, ERP integration, mergers, and corporate negotiations
This financial expert says entrepreneurs need to adapt to the following three important tips to improve their accounts payable process:
- Come up with a suitable strategy
This is the first step entrepreneurs need to take. The plan they come up to improve their accounts payable needs to have specific guidelines. Such rules should explicitly explain how and who approves the purchases the organization makes. It needs a mechanism to scrutinizing the invoices vendors issue for such transactions. Only then is it possible to prioritize the payment of such bills according to their importance?
- Introduce automation into the system
Entrepreneurs may want to streamline their organization’s existing accounts payable system. To achieve their objective, they should seriously consider automating the entire process. These businessmen won’t regret taking this decision. This is because the manually sorting and classifying their vendors’ invoices according to their importance is time-consuming.
Moreover, it is also prone to inadvertent human errors. This makes the prompt payment of such bills even more difficult. Many of these proprietors can go a step further. This can implement a suitable ERP mechanism which links their networks to their suppliers’ system.
- Protection against frauds and misappropriations
Frauds and misappropriations relating payment of vendors’ invoices are on the rise. Recent research shows small businesses lose a lot of money from theft. Entrepreneurs need to necessary steps to ensure their organizations don’t fall into such pitfalls. The automation system they implement to improve the efficiency of account payable process is the first line of defense. This mechanism should be able to monitor and detect such malpractices. Moreover, these businessmen should appoint 2 or more employees to authorize the payments of suppliers’ bills. They should also consider introducing and conducting periodic audits.
Officials of the prominent international company have high regard for the Arnon Dror name. Many of them have been successful in implementing his above three important tips to streamline accounts payable. It says it works wonders for their cashflow position. It helps their concerns combat potential frauds relating payment of vendors’ invoices before they occur. This should clear all doubts in the minds of entrepreneurs. They should take necessary steps in this direction.