In this instructional video, Sachin Sharma, founder of Procuredesk, explains how an Accounts Payable (AP) team can be transformed from a simple bill‑paying function into a cash‑generating asset. He outlines three core strategies: (1) optimizing payment run frequency—shifting from monthly or bi‑monthly runs to a weekly schedule—to avoid paying vendors before their due dates and thereby save interest on borrowed cash; (2) using AP data (purchase orders, contracts, and committed spend) to forecast cash flow, enabling proactive budgeting and eliminating surprise invoice expenses; and (3) capturing early‑payment discounts (e.g., 2% for net‑10) by accelerating invoice processing through better technology or processes. He adds a bonus tip: paying approved invoices with a credit or virtual card that offers an additional float period, extending cash availability while still meeting vendor payment terms. The video concludes with a recap of the three strategies and the bonus tip, and a call to subscribe for more content.
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If you think that Accounts Payable team is all about paying vendor bills, think again. Done right, your AP team can not only help manage vendor bills, but also manage your cash flow and also help you decrease the interest rate if you're borrowing to satisfy your ap. So in this video I'm going to give you three strategies and if done right, can convert your accounts payable team into a revenue generating machine and stick till the end. And I'll share one tactic that you can implement today to positively impact your cash flow. Now, if you're joining me for the first time, welcome. My name is Sachin. I'm the founder of Procuredesk where we help growing companies manage their AP efficiently. So let's get started. Number one is optimize your payment runs. Now if you are paying, let's say once a month or twice a month, that is a very common practice for many AP teams and for obvious reasons, right. You don't have all the time to kind of keep running the payment check runs and so on. The problem with that is you land up paying your vendors early because a lot of times if you are paying on 15th and the vendor bill is due on, let's say 18th or 19th, you know that you're not going to run another payment run for another 15 days, so might as well add them, right? And over a period of time you might have this practice where a lot of these vendors are getting paid earlier than their due date and you're not even realizing it. Now should you pay it every day? No, that is extreme, right? But you could go down to a weekly schedule where you only pay, let's say pay on Friday for anything that is due that week. Now it's possible that some of the vendors will get delayed, but at most there's two or three days of delay, which I think is manageable with most vendors. But the benefit for you is you are not paying the vendors sooner. And if you were borrowing from a cash standpoint, you save on interest rate. So it's as simple as that. Number two is use your AP team to forecast the cash flow. Number one problem which most growing companies have is surprise expenses. So you have a last minute invoice that shows up and that needs to be paid now, right? So you could do two things. You could, you can rob Peter to pay Paul or you can borrow more cash, right. If you have a short term borrowing facility and so on. In either ways you are, you know, either pissing off somebody else, right. Because you didn't pay them on time or you are Paying more interest. So how do you solve that problem? The easy way to solve that problem is have AP team involved in your purchasing process. So looking at like let's say whether you have a pre negotiated contract or you have a list of purchase orders where you know what you have already committed, use those two data points to forecast your cash flow. So you know exactly when you need, how much you need, right? So you can optimize for that. Does that mean you will still pay the whole thing? You know when it is due? Maybe not. So you might be able to then smartly map your, you know, your cash with the ap, but you are being proactive, you're not being reactive and there is no last minute invoice which is going to mess up with your planning, right? So it just runs more smoothly. Number three is, and this is basically a reverse of what we have talked so far, right? In terms of optimizing the payment runs and then forecasting the cash flow is early payment discount. Now if you are in a position where you have enough cash flow to pay the vendors early, you can avail early payment discounts. So what do I mean by that? Right? So typically if you, let's say we have net 30 payment terms most renters will give you and you should ask for it by the way, if you're not asking is 2% net 10. So if you pay within 10 days of the invoice date, you will be able to save 2% on that invoice. It's as simple as that. And imagine if you're paying hundreds of Thousands of dollars, 2% can add up pretty quickly. The problem is most companies can't process their invoice in 10 days to avail early payment discounts. So you can use your AP team to implement a better process or a better technology that can help you reduce the invoice cycle time. And if you are doing all that, then you should be in a position to process the invoices faster and pay them sooner to avail the early payment discount. Right? So those are the three strategies that can help you convert your AP team into a cash generating machine. So let's talk about one bonus tip that you can implement just today and that is use of credit cards. So what I mean by that, I do not mean to say you should give credit cards to all the employees so they can buy on a credit card. No, what I mean here is you could pay the invoice by a credit card. So once the invoice is approved, you can still pay the vendor either by check ach or a virtual card or a credit card. And either way, if you're using a credit card that gives you additional 30 days afloat, the vendor gets paid on time. Now, not every vendor will accept a credit card, but if they're accepting from one vendor or one customer, they will accept yours too, right? So go and ask the vendor if they will accept credit card payment. And most vendors will say yes to that, right? So that's just a quick tip you can implement today. So to summarize, here are the three strategies you can Use AP Team to optimize the payment runs Use AP Team to forecast the cash flow and three is avail early payment discounts. If you found this video helpful, feel free to hit the subscribe button so you get notified when we release videos like that. Thanks for joining me today, and I'll see you in the next video.
