Account Payable Outsourcing Definition
Account payable outsourcing is the process of hiring a third-party provider to manage an organization’s account payable function. The outsourced provider assumes responsibility for all aspects of the account payable process, from invoicing and payment processing to vendor management and relationship building.
The advantages of outsourcing account payable include access to best-in-class technology, improved efficiency and cost savings. When done correctly, outsourcing can free up internal resources so that they can be redeployed to other strategic initiatives.
When considering whether or not to outsource account payable, organizations should first assess their internal capabilities and compare them against industry benchmarks. They should also consider the total cost of ownership, which includes both direct and indirect costs associated with the account payable function.
