When all is said and done, Accounts Payable (AP) is just about paying bills; right? But then, if profit is the ultimate goal of any commercial enterprise, paying bills is equal to money out the door. So, we need a strategy to see that the outflow happens in a regulated, strategic manner. Payments for services, including payments to staffing agencies for the use of contract workers, adds additional layers of complexity, as payments must be coordinated with validation of the successful completion of work. When done well, companies achieve some important benefits, like:
For any accounts payable process, the invoice forms a key document which represents and defines most accounts payable processes. An invoice has no standard format and can be customized to the requirements of each internal organization. However, that flexibility can also make it prone to human error in the form of clerical mistakes in preparing it, and even when receiving, validating and confirming payment against it.
Some best practices which help to avoid negative consequences would include:
If the process is bungled by either side or both sides; we could see consequences in the form of
Mishandling of invoicing and supplier payments always ranks near the top when identifying sources of dissatisfaction between companies and their staffing agencies. It is important to keep in mind that most staffing agencies pay their workers weekly while being paid monthly (at best) by their customers. Many depend upon a line of credit, incurring interest charges for the use of that money. It is critically important to suppliers that a highly accurate, timely and seamless process for invoicing and payment be established. The effective management of your back-office may be the determining factor regarding whether the relationship is beneficial to both parties, and to your suppliers’ commitment to delivering the best available talent.
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