Speed Up the Accounts Payable Process

Alvin Wasserman
Director of Asset Management,
Fairfield Properties

Speed Up the Accounts Payable Process

Setting the Scene

There was a TV show called The Flintstones in the 1960s. Set in prehistoric times, the animated series followed the adventures of Fred Flintstone, a Stone Age man. Every day, Fred would go to his job at the quarry where he would chisel away at rocks. When I think about accounts payable departments in many management companies, I am reminded of Fred. They’re chiseling away every day – and although they are only dealing with paper, they might as well be working in a rock quarry. It takes that long.

Think about it: an order is placed for goods and services. The order is delivered. An invoice arrives. At the management office, the papers are assembled for approval and then logged in. After approval, the invoice goes back to accounts payable for a paper check and a signature. The management office mails it to the contractor. If board members have questions about invoices, they may call or email the manager, or may send them back for review. Now, all of a sudden, a two- to three-week process takes a month.

Following the Action

To eliminate these delays, Fairfield is implementing a new program with AvidXchange. All invoices will be mailed to and all the backup documents will be logged in with AvidXchange. AX will then expedite payment by emailing the manager to review the documents online. If the property manager approves, it goes to the next stage. Board members or management signatories then receive an email saying that there are invoices to be approved. Questions and responses are submitted online. AvidXchange will mail a check to the vendor or contractor after the final approval. If the vendor or contractor would like ACH direct deposit of the payment, they can sign on with AvidXchange, and for a small fee, when the final approval is clicked, the money will be electronically transmitted to the bank account of the vendor or contractor. There are board members who may not be comfortable with this process. If that’s the case, when the property manager clicks approval, a paper check will be generated, and will then be delivered with backup to the board for signature.

Doing It Right

This innovation streamlines the front end of the process. The back end can also be expedited using AvidXchange, or the old-fashioned way by delivering paper checks to the properties. Boards need to be comfortable with the process one way or the other. The post office can take up to five days to deliver a check a short distance. That lag is eliminated if there is a direct deposit into the vendor or contractor’s bank account. Many contractors and vendors choose this option that is similar to accepting a credit card payment.