A Day in the Life of an Accounts Payable Manager

As an experienced corporate controller with over 15 years in the accounting field, I've witnessed firsthand the transformative changes within the accounts payable domain. In this comprehensive blog post, I'll take you on a journey through a typical day in the life of an AP manager, highlighting the key responsibilities, challenges, and best practices that can help you stand out in this dynamic field.

9:00 AM - Tackling Vendor Inquiries and New Invoices

When an accounts payable manager arrives at the office, the first order of business is often addressing the influx of vendor inquiries. These emails, sometimes laced with a passive-aggressive tone, are a common occurrence, as vendors eagerly await the payment of their outstanding invoices. As an AP manager, it's essential to approach these inquiries with professionalism and empathy, understanding the vendor's perspective while also maintaining the company's financial interests.

After addressing the vendor emails, the AP manager turns their attention to the new batch of invoices that have arrived, both electronically and through traditional mail. In today's digital age, it's surprising to see how many vendors still rely on physical mail for invoice submissions, a practice that can create additional administrative burdens. Nonetheless, the AP manager must diligently process these invoices, ensuring they are properly coded and routed for approval.

10:30 AM - Seeking Approvals and Coding Transactions

The core of an AP manager's day involves the meticulous processing of invoices. This process encompasses two critical steps: seeking approval from the business side and coding the invoice into the accounting system.

Obtaining approval from the business side is crucial to ensure that the goods or services were indeed received and that the invoice aligns with the company's purchasing protocols. This step often requires the AP manager to collaborate with various departments, fostering strong cross-functional relationships and clear communication.

Once the approval is secured, the AP manager must then code the invoice into the accounting system, selecting the appropriate general ledger account, department, entity, and location. This attention to detail is essential for maintaining accurate financial records and facilitating seamless month-end reconciliations.

1:00 PM - Making Payments

The next phase of the AP manager's day involves the actual disbursement of payments to vendors. This process has undergone a significant transformation in recent years, moving away from traditional check-writing and wire transfers to more streamlined, digital payment methods.

• Integrated Payment Processing: Modern AP managers leverage their enterprise resource planning (ERP) software or specialized platforms like Bill.com, Tipalti, or Coupa to process payments directly from the same system where they manage invoices. This integration eliminates the need for manual payment setup, reducing the risk of errors and accelerating the payment cycle.

• Vendor Self-Onboarding: To further enhance the payment process, AP managers can implement vendor self-onboarding, where vendors are responsible for providing and maintaining their own banking information. This approach helps mitigate the risk of inaccurate data entry, which could lead to misdirected payments.

• Purchase Order (PO) Process: Establishing a robust purchase order process can be a game-changer for AP managers. By requiring employees to submit PO requests before engaging with vendors, the AP team can proactively review and approve spending, ensuring alignment with budgets and preventing unexpected invoices from slipping through the cracks.

3:00 PM - Month End Tasks

As the day draws to a close, the AP manager's attention shifts to the critical task of month-end reconciliations. This process serves as a vital internal control, verifying the accuracy of the company's financial records and identifying any discrepancies or errors that may have occurred during the payment cycle.

The two primary accounts that the AP manager reconciles are the cash account and the accounts payable account. By reconciling the cash account, the AP manager ensures that all cash disbursements have been properly recorded and accounted for, providing a clear picture of the company's liquidity. The reconciliation of the accounts payable account, on the other hand, helps the AP manager identify any potential misstatements or unrecorded liabilities, ensuring the integrity of the balance sheet.

These month-end reconciliations not only serve as a means of internal control but also demonstrate the AP manager's attention to detail and commitment to financial transparency. By proactively identifying and addressing any discrepancies, the AP manager can contribute to the overall financial health and decision-making processes of the organization.

Becoming a Standout AP Manager: 4 Tips and Tricks

To truly excel as an accounts payable manager and stand out from the crowd, there are several best practices and strategies that can be implemented. Here are four key tips to consider:

1. Streamline the Payment Process

As mentioned earlier, the evolution of payment methods has transformed the accounts payable function. By leveraging integrated payment processing solutions, AP managers can streamline the payment workflow, reducing the time and effort required to disburse funds to vendors.

Instead of relying on traditional check-writing or wire transfers, AP managers should explore the capabilities of their ERP software or specialized platforms like Bill.com, Tipalti, or Coupa. These solutions allow for seamless integration, enabling the AP team to process invoices and make payments from a single, centralized platform.

2. Implement Vendor Self-Onboarding

Onboarding new vendors can be a time-consuming and error-prone process, as the AP manager must collect and input various vendor information, including banking details. To streamline this task, AP managers should consider implementing a vendor self-onboarding system.

By providing vendors with a secure link or portal to input their own information, the AP team can eliminate the risk of data entry errors and reduce the administrative burden associated with vendor onboarding. This approach not only enhances efficiency but also empowers vendors to take ownership of their own information, fostering a more collaborative relationship.

3. Establish a Purchase Order (PO) Process

While the traditional accounts payable function often involves reacting to incoming invoices, a proactive approach can yield significant benefits. By implementing a robust purchase order process, AP managers can gain greater control over the company's spending and ensure alignment with budgetary constraints.

This process typically involves the creation of a digital PO request form, where employees must submit their spending requests for review and approval before engaging with vendors. The AP team can then review these requests, verify budget availability, and provide the necessary approvals before the actual purchase takes place. This approach helps prevent unexpected invoices and enables the AP manager to maintain a more strategic oversight of the company's financial commitments.

4. Leverage Key Performance Indicators (KPIs)

To demonstrate the value and efficiency of the accounts payable function, AP managers should embrace the use of key performance indicators (KPIs). These metrics provide tangible data points that can be used to measure the success of the AP team and identify areas for improvement.

Some essential KPIs for AP managers to consider include:

• Days Payable Outstanding (DPO): This metric measures the average number of days it takes to pay vendor invoices, providing insights into the efficiency of the payment process.

• Error Rate: Tracking the occurrence of payment errors, such as incorrect vendor information or coding mistakes, can help the AP manager identify areas for process refinement and staff training.

• Vendor Satisfaction: Monitoring vendor feedback and the frequency of inquiries or disputes can shed light on the quality of the AP team's vendor relationships and communication.

By regularly monitoring and reporting on these KPIs, AP managers can demonstrate their team's contributions to the overall financial health and operational efficiency of the organization.

Conclusion: Embracing the Evolution of Accounts Payable

The role of the accounts payable manager has evolved significantly, transitioning from a purely transactional function to a strategic, technology-driven role that requires a diverse set of skills. By embracing digital transformation, implementing best practices, and leveraging key performance indicators, AP managers can not only streamline their day-to-day operations but also position themselves as valuable contributors to the organization's overall financial success.

As you embark on your journey as an accounts payable manager or continue to refine your skills in this dynamic field, remember to stay adaptable, innovative, and focused on building strong vendor relationships. By mastering the art of efficient payments and vendor management, you can elevate the AP function and demonstrate your value as a strategic partner within the organization.

For more insights and resources on accounts payable and the entire accounting cycle, be sure to check out the Controller Academy and the Total Controller Access Bundle. These comprehensive programs, developed by a seasoned corporate controller, offer a wealth of practical knowledge and real-life case studies to help you excel in your AP and broader accounting responsibilities.