5 Tips to Improve Accounts Payable

Author: Christian Bailey

‍Title: Professional Services Consultant

‍Organization: Karmak, Inc.

An efficient Accounts Payable (AP) process is essential to keeping financial operations accurate, consistent, and scalable. In many organizations, AP remains highly manual, leading to errors, delays, and wasted staff time. By fully leveraging the tools in your business system, you can streamline invoice handling, strengthen vendor communication, and improve reconciliation accuracy.

Here are five best practices to improve your Accounts Payable process.

1. Use Account Allocation Tables to Split Transactions

Account Allocation Tables allow you to automatically divide a single transaction across multiple departments within the same GL account. Instead of repeatedly entering the same GL with different departments, you can set up allocation rules by percentage. This ensures expense accuracy, consistency in reporting, and faster processing of invoices that span multiple departments.

When tied directly to the GL, allocation rules apply automatically, eliminating manual steps. This not only saves time but also reduces the chance of data entry errors.

2. Add Comments to AP Invoices for Better Vendor Communication

Clear communication reduces vendor disputes and follow-up calls. By adding comments to AP invoices, you ensure that important notes — such as invoice references or clarifying details — are printed directly on the check stub.

To activate this feature, you’ll need to create a comment type that allows printing on the stub. Once in place, notes can be added to both new and posted invoices, giving vendors the context they need without additional back-and-forth.

3. Set Liability Offsets Behind Vendors

In the Accounting Setup application, you can assign a default liability offset to each vendor. This ensures that the correct offset GL automatically populates during invoice entry — particularly useful for recurring vendors such as utility providers.

While only one default GL can be tied to each vendor, users can still override it when needed. The benefit is greater consistency, fewer manual selections, and more accurate financial postings.

4. Regularly Review Posting Reference and MPO Recon Reports

Maintaining accurate inventory valuation and AP reconciliation requires consistent review of system-generated reports.

• Posting Reference Recon Report: Confirms that the cost at receipt matches the cost posted to the inventory GL and ensures all parts received are properly tied to AP invoices.
• Misc. Purchase Order (MPO) Recon Report: Focuses on miscellaneous purchase orders — which are not formally received — ensuring invoice entries and inventory costs align.

Regularly reviewing both reports helps catch discrepancies early and keeps AP records aligned with inventory balances.

5. Use the Parts Receiving Recon Application

When vendor invoices don’t match receiving references, the Parts Receiving Recon application provides the tools to resolve the issue. With it, AP staff can merge or split references, adjust costs, or escalate mismatches to the parts department.

This capability empowers AP to resolve many discrepancies directly, supports accurate reconciliations, and keeps financial reporting clean and reliable.

Why Strong AP Practices Matter

Optimizing Accounts Payable is about more than invoice entry — it’s about protecting financial accuracy, strengthening vendor trust, and reducing the administrative load on your staff. By adopting these five practices, you can save time, minimize errors, and ensure AP processes scale with your business.

Looking to take AP efficiency even further? Karmak partners with third-party AP automation providers that specialize in invoice import, matching, and process automation.

Need help implementing these AP improvements? Contact your Karmak Representative or email ProfessionalServices@Karmak.com to get started.

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