eCommerce Accounts Payable: Optimizing Your AP Process

The accounts payable process for an eComm startup is the backbone of a good vendor/supplier relationship. It helps ensure that suppliers are paid promptly and secures consistent product availability. It also helps optimize cash flow by managing when payments are made, which can affect overall financial health. Finally, a robust accounts payable process can help monitor expenses and identify opportunities to save costs.

Graphite Financial specializes in helping to streamline the accounts payable process for eComm startups. Read on to learn more or contact Graphite today to schedule a free consultation.

The Challenges of Managing Accounts Payable for eCommerce

The accounts payable process isn’t as easy as it may seem. Some of the common pain points that eComm startups often face include:

• Challenges associated with manual invoice tracking and reconciliation.
• Challenges with data accuracy.
• Difficulty managing high transaction volumes and international payments.
• Payment processing inefficiencies that can delay payments and disrupt cash flow.
• Cash flow management issues due to an inefficient accounts payable process.
• Strained supplier relationships from inefficient processes.

Why eCommerce Startups Should Outsource Accounts Payable Services

While you can handle accounts payable services in-house, a better option for many eComm startups is to outsource them. This can be especially helpful for startups in a significant growth phase. Some of the key benefits of outsourcing accounts payable services include:

• Saving time and money: You can save money by working with a trusted partner versus hiring a full-time accountant or team of accountants to handle accounts payable. Additionally, this will also save time—as you won’t have to allocate any in-house resources away from other aspects of the startup.
• Access to accounting expertise: A trusted, qualified partner will do more than just streamline your accounts payable process, but also comply with tax law and other various best practices.
• Other benefits: This includes the opportunity to improve vendor relationships, prevent fraud and further streamline services with advanced programs that incorporate automation and AI into the offerings. Outsourcing can also help you optimize your entire accounts payable process, improving efficiency and freeing up resources for growth.

Signs Your eCommerce Startup Needs to Outsource AP

Does your eComm startup need to consider outsourcing its AP process? Here’s a look at some signs that may indicate so:

• You’re struggling with invoice receipt volume and missing payments.
• You have a lack of financial expertise in-house.
• You’re a startup with a limited budget.
• You’re in growth mode and finding it difficult to keep up.

How to Choose the Right Outsourced Accounts Payable Service Provider

If you’ve decided to look outside your startup for accounts payable help, the next step is deciding on a partner. You should be vetting any accounting provider just as you would any other partner.

Some things you’ll want to look for are technology integration with your existing programs and the ability of the partner to scale with you as you grow. You should also be doing your due diligence when it comes to learning about fees, Service Level Agreements (SLAs) and compliance with various financial regulations.

Integrating AP Software with eCommerce Platforms

One of the biggest things that you should be looking for in an AP partner is whether they use software options that integrate with your other eComm platforms. This can help with real-time tracking and payment scheduling. Some leading options include NetSuite, Tipalti and QuickBooks Online.

Best Practices for Managing AP in eCommerce Startups

Looking to improve your accounts payable process? While a trusted, qualified partner can help, other actionable steps can be taken to better streamline the process in eComm. These include:

• Automating processes to reduce manual labor.
• Arranging vendor payment schedules to avoid late fees and ensure timely payments.
• Regularly reconcile accounts.
• Monitor KPIs to assess and improve your accounts payable management.

Common Accounts Payable Mistakes eCommerce Startups Make

Accounts payable mistakes can be bad for your bottom line and even worse for maintaining supplier relationships. Some of the key mistakes you’ll want to avoid include missed payment deadlines, double payments and poor fraud control. When errors like this occur, it can spell bad news for maintaining positive supplier and vendor relationships.

Some ways to avoid these pain points include using automation to streamline efforts and reduce human error. Compliance tracking is also vital for e-commerce startups as it ensures adherence to legal, regulatory, and industry standards. This can protect the business from legal risks, enhance trust with customers, and streamline operations.

Simplifying Accounts Payable for eCommerce Success

A good accounts payable process is good for your supplier relationships—and good for your startup. It can help avoid cash flow disruptions and ensure business continuity—and it can also ensure that your supplier and vendor partners are paid in a timely manner, which can improve working relationships.

Graphite is here to help your eComm startup with its account payable services and support scaling your operations. If your accounts payable process isn’t up to snuff or you believe it could benefit from an improvement, contact Graphite today to learn more about what we can do for you.

Ready to Outsource Your Accounts Payable?

For more information on streamlining your accounts payable process and how Graphite can help, contact us today. When you work with a trusted provider, you can free up time and budget for business growth, while ensuring that this critical process is properly managed.

Streamline your AP and focus on scaling your startup by working with the financial experts at Graphite.

FAQs

What is the role of accounts payable in an eCommerce startup?

Accounts payable is paying money that’s owed to vendors or suppliers that eComm startups purchase on credit. eComm startups usually have to manage a significant number of invoices, international payments and multiple payment methods. Some examples of common transactions are supplier payments, product sourcing, refunds and returns.

How does outsourcing AP benefit eCommerce startups?

Outsourcing AP services can help eComm startups save time and money, have direct access to financial expertise, improve relationships with suppliers and vendors, and also ensure compliance with any financial rules and regulations.

What software solutions integrate with Shopify and WooCommerce?

Some solutions include BigCommerce, QuickBooks Online, A2X, MyWorks and more.

What are the key challenges of managing AP for eCommerce startups?

Key challenges include manual invoice tracking and evaluation, errors associated with managing high transaction volumes with multiple suppliers, and keeping up with growth and scaling.

How can automation improve the AP process?

Automation can help reduce manual data entry, eliminate errors, detect fraudulent invoices, streamline approval workflows, prevent duplicate payments, and ensure timely payments to vendors and other partners.

What should I look for when choosing an AP service provider?

Look for technology integration with your existing programs and the ability of the partner to scale with you as you grow. Also learn about fees, SLAs and compliance with various financial regulations.