10 Accounts Payable Accounting Best Practices to Follow in 2025
Table of Contents
Accounts payable (AP) is a vital function for any business, directly influencing financial stability and operational efficiency. However, many organizations face challenges such as manual errors, delayed payments, and compliance risks that disrupt cash flow and vendor relationships. Research indicates that over 60% of businesses report increasing fraud risks, and more than 40% of CEOs highlight payment delays as a significant issue. With global supply chains growing more complex and digital payments becoming standard, 2025 demands modernized AP strategies. By adopting technology and automation, businesses can address these challenges effectively. This blog explains the 10 key AP accounting best practices to optimize payment processes, reduce costs, and strengthen financial operations.
Key Takeaways
- Use AP workflows to handle the entire AP lifecycle for greater accuracy and efficiency.
- Transition to ACH and digital options for faster, cost-effective transactions.
- Leverage embedded e-invoicing to meet tax and regulatory requirements seamlessly.
- Enable remote access and collaboration with cloud-based AP systems.
- Connect AP with accounting software for real-time data synchronization and better decision-making.
10 Accounts Payable Accounting Best Practices for 2025
1. Automate the Entire AP Workflow
Manual AP processes are time-consuming and error-prone, leading to inefficiencies that can cost businesses significantly. Automating the AP lifecycle is a cornerstone of AP accounting best practices. Zenwork Payments automates invoice intake to payment execution, using optical character recognition (OCR) for accurate expense tracking and invoice categorization. Automated invoice capture via email, mobile, or app eliminates manual data entry, while customizable approval workflows, batch processing, recurring billing, and automated reminders reduce errors. Companies automating AP can reduce invoice processing costs by up to 80% and cut processing time from 25 days to 5 days.
2. Embrace Fast, Paperless Payments with ACH and Digital Options
Paper checks are outdated and costly, slowing down payment cycles. Transitioning to digital payments is a critical AP accounting best practice. Zenwork Payments supports secure electronic options like ACH transfers and checks, speeding up transactions and improving expense tracking. This aligns with the industry’s digital-first trend, reducing operational costs. Over 40% of CEOs cite payment delays as a major disruption, emphasizing the need for faster payment methods.
3. Ensure Global Tax and Regulatory Compliance Through Embedded E-Invoicing
Compliance with tax and regulatory requirements is essential for AP accounting best practices. Zenwork Payments integrates with Tax1099, automating federal 1099 filings. State 1099 filing automation is available within Tax1099, automating federal and state 1099 filings, supporting TIN verification, and aligning with Beneficial Ownership Information (BOI) reporting. Zenwork Payments also supports core GAAP principles through accurate expense tracking and invoice categorization. This integrated approach helps businesses meet e-invoicing regulations without multiple systems, minimizing compliance risks.
4. Access Anywhere: Cloud-Based AP for a Distributed Workforce
With remote work prevalent in 2025, cloud-based AP solutions are vital for accessibility. Zenwork Payments, a cloud-native platform, offers anytime-anywhere access to invoice, payment, and vendor data. Role-based permissions and centralized data support remote collaboration, ideal for businesses with global operations. This enhances expense tracking and invoice categorization, aligning with AP accounting best practices for modern work environments.
5. Seamlessly Connect AP and Accounting Systems
Integration with accounting systems ensures accurate financial reporting and efficient workflows. Zenwork Payments provides two-way integrations with platforms like QuickBooks, enabling real-time data sync between AP and the general ledger. This reduces reconciliation errors, improves expense tracking, and offers a comprehensive view of financial operations, supporting smarter decision-making and AP accounting best practices.
6. Empower Vendors with a Self-Service Portal
Efficient vendor interactions are key to strong relationships. Zenwork Payments offers a vendor portal where vendors can submit invoices, track payment status, and update W-9 and bank information. This reduces manual communication, enhances invoice categorization accuracy, and builds vendor trust, aligning with AP accounting best practices for operational efficiency.
7. Streamline Invoice Approval with Custom Workflows
Timely invoice approvals prevent cash flow disruptions and late fees. Zenwork Payments provides configurable approval workflows that route invoices based on rules, hierarchy, or amount thresholds. Audit trails and role-based controls ensure security and compliance with GAAP regulations, such as accurate expense tracking, supporting efficient AP processes.
8. Capture Early Payment Discounts with Smart Payment Scheduling
Early payment discounts can significantly reduce costs and improve cash flow. Zenwork Payments combines payment scheduling, automated reminders, and early payment options to help businesses seize these opportunities. By prioritizing timely invoice processing and accurate expense tracking, this AP accounting best practice supports financial optimization.
9. Strategically Manage Working Capital with Flexible Payout Tools
Effective working capital management is a strategic advantage. Zenwork Payments offers recurring payment scheduling, and invoice creation and tracking, enabling businesses to optimize payment timing. These features enhance expense tracking and vendor satisfaction, making this a key AP accounting best practice.
10. Build Stronger Vendor Relationships with Transparency and Speed
Transparency and timely payments foster vendor loyalty. Zenwork Payments delivers automated invoice delivery, status tracking, and early pay options, reducing disputes and improving invoice categorization. This positions businesses as reliable partners, a vital AP accounting best practice for securing better terms and loyalty.
FAQs
- What are the top AP accounting best practices for 2025?
Top AP accounting best practices for 2025 include automating workflows, adopting digital payments, ensuring compliance with e-invoicing, using cloud-based systems, integrating with accounting software, providing vendor portals, streamlining approvals, capturing early payment discounts, managing working capital, and enhancing vendor relationships.
- How can businesses improve expense tracking in their AP processes?
Businesses can improve expense tracking by automating invoice capture with OCR, integrating with accounting software for real-time data sync, and centralizing data in a cloud-based system, ensuring accuracy and visibility.
- Why is invoice categorization important in accounts payable?
Invoice categorization organizes invoices for efficient processing, accurate financial reporting, and compliance with tax and audit requirements, enabling better expense tracking by category or department.
- How do GAAP regulations impact accounts payable, and how can businesses ensure compliance?
GAAP regulations require accurate financial recording in AP. Businesses can ensure compliance with systems like Zenwork Payments, which support expense tracking, invoice categorization, and audit trails aligned with the core GAAP principles.
- What role does automation play in modern AP processes?
Automation reduces errors, speeds up invoice processing, improves cash flow, and ensures compliance, enabling businesses to manage high invoice volumes efficiently with real-time insights.
Conclusion
Adopting these 10 AP accounting best practices in 2025 will optimize accounts payable processes, reduce costs, and strengthen vendor relationships. Zenwork Payments offers a comprehensive solution with automation, digital payments, and integrations to support these practices, ensuring financial efficiency and compliance.
Ready to transform your AP process? Start your 30-day free trial with Zenwork Payments today!
