Why Do E-commerce Businesses Need To Manage Their Accounts Payable?

With the increase in e-commerce businesses, there are now more online platforms for e-commerce businesses to sell their products. In addition, these platforms have made it easier for people to buy your products from any corner of the world. This has led to an explosion in the number of e-commerce businesses and suppliers. If you operate an e-commerce business, you need a robust system that manages your accounts payable. Accounts payable refers to when a company’s vendors bill them for the goods or services they have bought from them. These can be difficult to manage by yourself as they are complicated and time-consuming. Therefore, hiring outsourced accounts payable services is better to help you manage this process. But before that, let us understand why managing your e-commerce accounts payable process is important. 

What is Accounts Payable? 

Whether in service-based or product-based industries, you will have to make purchases and hire services to run your business. All these expenses are part of what is called “accounts payable.” Accounts payable refers to when a company’s vendors bill them for the goods or services they have bought from them.  

Why do you need an Accounts Payable Automation Solution? 

If you have not automated your accounts payable processes, you will find it very difficult to meet your monthly cash flow targets. This is mainly because you will have to work manually on your accounts payable processes each month. You will also have to reconcile your bank accounts and reconcile the differences between your bank accounts and the e-commerce software’s bank account. If you have a small business, you will also have to assist with reconciling your bank accounts and the e-commerce software’s bank accounts. These are tasks that are best left to an automation solution. With an automation solution in place, you will not have to worry about manual e-commerce bookkeeping to input all of your invoices and payments. This means you can spend more time growing your business and less on mundane tasks such as reconciling bank accounts or assisting with reconciliation. 

 
How to choose the right Accounting Software for e-commerce businesses  

Though there is numerous e-commerce accounting software that businesses can choose from, it is important to get one that best fits your business’s needs. Many software offers free trials, so you can try them and compare their features to determine which ones are useful. You can choose a software that only offers accounts payable services, such as Tipalti, Stampli, etc., or you can go with software that helps manage the entire e-commerce bookkeeping and accounts payable processing, like FreshBooks, QuickBooks, etc. Following are some things that you should consider to find the best accounting software for your e-commerce business: 

1. Pricing model - The pricing model you choose will determine how much you pay for your solution. A freemium model will likely be free and offer limited features. An on-premise solution will likely be costly and require you to buy the software. A SaaS solution will likely be cheap and provide you with both access and control over the software.  

1. Support and upgrade policy - The support and upgrade policy you choose will determine how often you have to pay for your product. An annual license will likely be inexpensive, but you risk losing your software during the year if you no longer need it. A subscription model will likely be expensive at first, but you will have full access to your software.  

Final Words 

Automating your accounts payable processes will enable you to spend less time doing administrative work and more time growing your business. It will also enable you to spend less time assisting with reconciliation and more time invoicing new customers. This means diligently managing the accounts payable process is important, and hiring help from accounts payable services provider is even more beneficial for the entire process and your business. Automation and outsourcing allow businesses to save time, money, and resources while avoiding errors and discrepancies.