In the rapidly evolving world of Accounts Payable (AP), it's vital to stay up-to-date with industry jargon. With a vocabulary unique to the field, it can be daunting for newcomers or anyone trying to navigate the intricacies of AP. This guide is intended to help you grasp the most common buzzwords, which will make communication and comprehension a lot easier in your professional life.
Accounts payable is far more than just paying bills. It's an intricate world of systems, technologies, and processes, all of which have their own specialized vocabulary. For anyone who's ever felt lost in a sea of jargon, this guide is for you. We're here to simplify and explain the top 50 buzzwords in accounts payable.
Here are some common buzzwords in the accounts payable community:
- Automation - The use of technology to automate and streamline accounts payable processes, reducing manual labor and errors.
- Digital transformation - The process of using digital technologies to transform traditional accounts payable processes into more efficient and effective ones.
- Electronic invoicing (e-invoicing) - The process of submitting and processing invoices electronically, rather than using paper-based methods.
- Payment terms - The agreed-upon terms between a buyer and supplier for when payments are due.
- Purchase-to-pay (P2P) - A term used to describe the entire process from purchasing goods or services to paying for them.
- Invoice matching - The process of matching invoices to purchase orders and goods received notes to ensure accuracy.
- Payment processing - The process of making payments to suppliers.
- Accounts payable automation - The use of software to automate and streamline accounts payable processes.
- Accounts payable management - The process of managing the accounts payable function, including invoicing, payments, and vendor relationships.
- Spend management - The process of managing spending across an organization, including tracking expenses and optimizing purchasing decisions.
- AP analytics - The use of data analytics to gain insights into accounts payable processes and identify opportunities for improvement.
- Vendor management - The process of managing relationships with suppliers, including negotiating contracts, monitoring performance, and resolving issues.
- Three-way matching - The process of comparing a purchase order, goods receipt, and invoice to ensure that the correct goods or services were received and invoiced accurately.
- Payment fraud - The use of fraudulent tactics to steal funds from a company during the payment process.
- Cash flow management - The process of managing the flow of cash into and out of a business, including managing accounts payable and receivable.
- Invoice approval workflow - The process of routing invoices to the appropriate approvers within a company, based on predefined rules and workflows.
- Invoice financing - The process of obtaining financing based on outstanding invoices, allowing companies to access funds before payment is received.
- Accounts payable outsourcing - The practice of outsourcing accounts payable functions to a third-party service provider, allowing companies to focus on core business functions.
- Early payment discounts - The use of discounts to incentivize early payment of invoices, helping suppliers improve cash flow and reducing accounts payable costs for buyers.
- Continuous improvement - The practice of continually evaluating and improving accounts payable processes to increase efficiency, reduce errors, and improve cash flow.
- Invoice processing - The process of receiving, validating, and entering supplier invoices into the accounts payable system.
- Vendor portal - A web-based platform that allows suppliers to access information about their accounts, submit invoices, and track payment status.
- Straight-through processing (STP) - The automated processing of transactions without the need for manual intervention, improving efficiency and reducing errors.
- Payment reconciliation - The process of matching payments made to suppliers with outstanding invoices and ensuring that payment information is accurate.
- Purchase order (PO) automation - The use of technology to automate the creation, approval, and processing of purchase orders.
- Accounts payable reporting - The use of data and analytics to generate reports on accounts payable performance and identify trends and opportunities for improvement.
- Invoice data extraction - The process of extracting data from supplier invoices and entering it into the accounts payable system, reducing manual data entry and errors.
- Document management - The process of managing electronic documents related to accounts payable, including invoices, purchase orders, and receipts.
- Invoice status tracking - The ability to track the status of invoices throughout the payment process, providing transparency and reducing payment delays.
- Artificial intelligence (AI) - The use of AI technologies such as machine learning and natural language processing to automate and optimize accounts payable processes.
- Multi-currency processing - The ability to process invoices and payments in multiple currencies, helping companies manage international transactions.
- Tax compliance - The process of ensuring that invoices and payments are in compliance with tax regulations and requirements.
- Touchless invoice processing - The use of technology to process invoices without any manual intervention, reducing errors and improving efficiency.
- Dynamic discounting - The use of technology to offer suppliers the option to receive early payment in exchange for a discounted rate.
- Blockchain - A distributed digital ledger technology that enables secure and transparent transactions between parties, potentially reducing the risk of fraud in accounts payable processes.
- Robotic process automation (RPA) - The use of software robots to automate repetitive and manual tasks in accounts payable processes.
- Exception handling - The process of managing and resolving exceptions, such as invoices that do not match purchase orders or that require additional approval.
- Payment processing fees - The fees charged by payment processors for processing accounts payable transactions.
- Self-service supplier portals - Web-based portals that allow suppliers to manage their accounts, submit invoices, and track payment status without the need for manual intervention.
- Audit trail - A record of all actions taken in the accounts payable process, providing transparency and accountability.
- Cognitive automation - The use of AI and machine learning technologies to enable cognitive decision making in accounts payable processes.
- Invoice data normalization - The process of standardizing invoice data to improve accuracy and reduce errors.
- Cloud-based accounts payable - The use of cloud-based technology to enable remote access, collaboration, and scalability in accounts payable processes.
- Approval workflows - The process of automating and streamlining the approval process for invoices, purchase orders, and other accounts payable documents.
- Data analytics - The use of data to gain insights into accounts payable processes and identify opportunities for improvement.
- Accounts payable software - Software designed to automate and streamline accounts payable processes, reducing manual labor and errors.
- Payment processing automation - The use of technology to automate the payment process, reducing errors and improving efficiency.
- Payment reconciliation automation - The use of technology to automate the payment reconciliation process, reducing manual labor and errors.
- Zero-touch invoice processing - The complete automation of the invoice processing process, from receipt to payment, without any manual intervention.
- OCR technology - Optical character recognition technology used to extract data from invoices and other documents, reducing manual data entry and errors.
Mastering the language of accounts payable can streamline communication and foster better understanding between all parties involved in the AP process. While it may seem overwhelming initially, knowing these 50 buzzwords will provide you with a strong foundation in AP lingo.
As technology continues to advance and influence the landscape of accounts payable, you can expect this lexicon to expand. It's always a good idea to stay updated with the latest terms, as well as any changes to existing ones.