Published: October 2025
For most Australian small and medium businesses, accounts payable feels like a necessary evil. Someone needs to process supplier invoices, ensure they're correct, schedule payments, and maintain vendor relationships. But the process consumes significant time without directly contributing to revenue or growth.
Many business owners fear that outsourcing accounts payable means losing control over when and what they pay. This concern keeps them stuck managing tedious AP tasks instead of focusing on activities that actually grow their business.
The reality is quite different. Properly structured accounts payable outsourcing saves enormous amounts of time while giving you better control and visibility than most in-house AP processes provide. This guide explains how it works and why Australian SMEs are increasingly choosing to outsource this function.
Accounts payable represents money your business owes to suppliers and vendors for goods or services received. The accounts payable process includes:
For small businesses, this might involve just a few invoices per week. For growing businesses, it quickly becomes dozens or hundreds of invoices monthly, consuming substantial time and attention.
Australian SMEs typically underestimate how much time accounts payable actually consumes.
Consider a business processing 50 supplier invoices per month:
That's 44 hours per month, or more than a week of full-time work, just on accounts payable. For businesses with more invoices or complex approval processes, the time commitment escalates further.
This time typically falls on business owners, office managers, or bookkeepers who could be doing higher-value work. Every hour spent processing invoices is an hour not spent on sales, customer service, strategic planning, or business development.
Beyond the direct processing time, accounts payable creates interruptions throughout the day. Suppliers call asking about payment status. Staff need urgent approvals for invoices. Questions arise about expense coding.
These interruptions break focus and reduce productivity across everything else you're trying to accomplish. The total time impact extends well beyond the hours directly spent on AP tasks.
Outsourcing accounts payable doesn't mean handing over your bank account to strangers. Instead, it means delegating the processing work while maintaining approval authority over payments.
Invoice receipt:Your suppliers can send invoices directly to your outsourced AP team, or you can forward them as received. The team handles all the administrative work from that point.
Invoice processing:The outsourced team reviews each invoice for accuracy, checks it against purchase orders or contracts, and codes it to the appropriate expense category in your accounting system.
Approval workflow:Invoices are organised and presented to you (or designated approvers in your business) for review and approval. You maintain complete control over what gets paid and when.
Payment scheduling:Once approved, the team schedules payments according to your instructions - whether that's immediate payment, payment by due date, or any custom timing you prefer.
Payment execution:This is where many businesses retain the most control. The outsourced team can prepare payment files that you authorise and process, or you can grant limited payment authority within parameters you set.
Reconciliation and reporting:The team handles reconciliation of payments with bank statements, matches payments to invoices in your accounting system, and provides regular reporting on payables aging, payment runs, and vendor status.
With properly structured outsourced AP, you maintain control over:
You're delegating the processing work, not the decision-making authority.
The time savings from accounts payable outsourcing are substantial and immediate.
Business owners and staff are freed from the 40+ hours monthly spent on invoice processing, data entry, and administrative AP tasks. This time can be redirected to revenue-generating activities, strategic work, or simply achieving better work-life balance.
For a business owner billing their time at $150 per hour, recovering 40 hours monthly equals $6,000 in opportunity cost savings. That's $72,000 annually in time value, far exceeding the cost of outsourcing.
When an outsourced team handles vendor queries, payment questions, and invoice clarifications, your day becomes less fragmented. Fewer interruptions mean better focus on important work.
Professional AP teams process invoices more quickly than business owners juggling multiple responsibilities. This speed means less time between invoice receipt and payment approval, reducing the risk of late payments.
Staff turnover creates knowledge gaps that require training new people on AP processes. With outsourced AP, you don't lose productivity when employees leave or go on holiday.
Month-end reconciliation becomes simpler when AP is maintained throughout the month by dedicated professionals rather than catching up in a rush at period-end.
Beyond time savings, outsourced AP delivers better accuracy and compliance than most in-house processes.
Dedicated AP professionals understand proper invoice coding, GST treatment, expense categorisation, and compliance requirements. They catch errors and issues that business owners might miss.
Professional AP teams use checklists and procedures that ensure consistency. Every invoice goes through the same verification steps, reducing errors and omissions.
Experienced AP teams identify duplicate invoices before payment, preventing overpayment to suppliers. This is a common problem when invoices arrive multiple times or through different channels.
Proper accounts payable processes create the audit trail required for tax compliance, including maintaining tax invoices, supporting documentation, and payment records for the required five-year period.
When invoices are coded correctly and consistently, your accountant can easily identify all legitimate business expenses for tax deductions. Poor AP coding often results in missed deductions or questioned claims.
Contrary to common fears, outsourcing AP typically improves cash flow management rather than undermining it.
Professional AP provides clear reporting on what you owe and when, giving better visibility for cash flow planning. You know exactly what payments are coming due in the next week, month, or quarter.
With clear visibility and professional support, you can implement strategic payment policies:
Late payments create penalties, interest charges, and damaged supplier relationships. Professional AP ensures payments happen on time, avoiding these costs.
Many suppliers offer discounts for early payment (e.g., 2% if paid within 10 days). In-house AP often misses these opportunities due to processing delays. Outsourced AP can systematically capture these savings.
When AP is managed proactively, you avoid the expensive emergency payments required when suppliers threaten to suspend service due to overdue invoices.
The key to successful accounts payable outsourcing is establishing clear parameters and approval workflows that maintain your control.
Set specific dollar thresholds for different approval levels:
These thresholds can be customised to your risk tolerance and business structure.
Establish clear policies about payment timing:
Most businesses using outsourced AP choose to retain bank account access controls:
Require regular reports that give you visibility:
Establish clear communication channels:
Not all outsourced AP services are equal. Choosing the right partner determines whether outsourcing delivers the promised benefits.
Australian-based AP teams understand local business practices, supplier expectations, and compliance requirements. They work during Australian business hours, making communication easier.
Time zone differences with offshore providers create delays in resolving issues and obtaining approvals.
Your AP partner should have deep expertise in your accounting software (Xero, MYOB, QuickBooks). They need to work within your existing systems rather than forcing you to change processes.
Good communication is essential. Your AP partner should explain issues clearly, respond promptly to questions, and proactively flag items needing attention.
Ask potential partners to explain their AP process in detail. Look for systematic approaches with built-in quality control, not ad-hoc methods that create inconsistency.
Look for partners with relevant qualifications like BAS agent registration or membership in professional accounting bodies. These credentials indicate proper understanding of Australian compliance requirements.
Modern AP services use secure cloud-based systems for collaboration, document storage, and workflow management. Avoid partners relying on email and manual processes.
Your needs will change as your business grows. Choose partners who can scale services up or down easily and accommodate changing requirements without disruption.
Outsourced accounts payable typically costs significantly less than hiring dedicated in-house AP staff while delivering better results.
Most outsourced AP services charge either:
Many providers offer hybrid pricing that combines fixed monthly fees with per-invoice charges above certain thresholds.
Compare outsourcing costs to in-house alternatives:
Beyond direct cost savings, consider:
The cost comparison doesn't capture intangible benefits like:
Transitioning to outsourced accounts payable requires planning but is typically completed within 2-4 weeks.
Week 1: Setup
Week 2: Transition
Week 3-4: Optimisation
Most businesses achieve full transition within one month, with the outsourced team becoming more efficient and valuable as they learn your business.
Take back your time with professional accounts payable management
Scale Suite provides comprehensive accounts payable services to Australian businesses, eliminating the time burden while maintaining your control over payments.
Our Sydney-based team delivers:
We don't just process invoices. We actively manage your payables to optimise cash flow, capture early payment discounts, maintain supplier relationships, and give you clear visibility of obligations.
Our registered BAS agents understand Australian tax implications of AP transactions and ensure proper GST treatment and documentation.
Whether you need complete AP outsourcing or support during busy periods, ScaleSuite provides flexible services that scale with your business needs.
You maintain complete control over what gets paid and when, while we handle all the time-consuming processing work.
Book a free consultation to discuss how ScaleSuite can reclaim 40+ hours monthly for your business while improving AP accuracy and compliance.
Won't outsourcing accounts payable cost more than doing it in-house?
For most Australian SMEs, outsourcing costs significantly less than hiring dedicated AP staff when you account for salary, superannuation, leave, training, and management time. Even comparing to business owner time spent on AP, outsourcing typically delivers net savings when you consider the opportunity cost of time freed up for revenue-generating activities.
How do I maintain control if someone else is processing my invoices?
You maintain control through approval workflows and payment authorisation. The outsourced team processes and prepares invoices, but you approve what gets paid. Many businesses retain exclusive bank account access, with the AP team preparing payment files that you authorise. You're delegating administrative work, not decision-making authority.
What if the outsourced team makes mistakes?
Professional AP teams have quality control processes that reduce errors significantly compared to in-house processing by busy business owners. However, mistakes can still occur. Good outsourcing agreements include provisions for error correction and may include professional indemnity insurance covering significant mistakes. The approval process also provides a check before payments are executed.
How quickly can outsourced AP be implemented?
Most businesses complete implementation within 2-4 weeks. The process involves setting up system access, configuring workflows, and training staff on new procedures. After initial setup, the outsourced team becomes progressively more efficient as they learn your business and supplier relationships.
Can outsourced AP work with my existing accounting software?
Yes. Professional AP services work within your existing Xero, MYOB, or QuickBooks system. They don't require you to change software or processes. Integration with your current system is a key advantage, maintaining your data in one place rather than requiring separate systems.
What happens when I need to query an invoice or make urgent payments?
Good outsourced AP includes clear communication channels for queries and urgent matters. Your AP team should be contactable during business hours and have established escalation procedures for urgent approvals or payments. The service should make handling exceptions easier, not harder.
How do I transition existing in-process invoices to an outsourced team?
The transition process includes a handover of all pending invoices, their status, and any issues. The outsourced team reviews these invoices and continues processing from their current stage. Most providers are experienced with transitions and can absorb in-progress work seamlessly during implementation.
Will my suppliers need to change how they send invoices?
Suppliers can continue sending invoices to your usual address or email. You simply forward received invoices to your AP team, or provide the team's email address to suppliers for direct invoice delivery. Most suppliers adapt quickly once informed of the change.
Scale Suite delivers embedded finance and human resource services for ambitious Australian businesses.Our Sydney-based team integrates with your daily operations through a shared platform, working like part of your internal staff but with senior-level expertise. From complete bookkeeping to strategic CFO insights, we deliver better outcomes than a single hire - without the recruitment risk, training time, or full-time salary commitment.
Considering hiring finance staff? Let's compare what you'd get with an internal hire versus our embedded team approach.
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