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The Advantages for Health Saving Accounts (HSAs): Employees find balance between health and wealth
The Advantages fo Health Saving Accounts (HSAs): Employees find balance between health and wealth
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Accounts Payable (AP) is often part of larger transformation initiatives within an organization. According to Gartner, 85% of CFOs are either implementing or planning to implement major Finance transformation initiatives.
Additionally, a recent survey conducted by Workday found that cost containment is a top priority for 59% of CFOs. But how do they execute these high-visibility projects for their organization?
The purpose of Accounts Payable is to pay supplier invoices according to legal settlement agreements entered into by company purchasing agents. Without an Accounts Payable function, a company’s suppliers would not get paid accurately and timely. Consequently, suppliers could stop providing necessary goods and reliable services to the company. In addition to paying suppliers on time, AP is the last line of defense around spend control and must ensure the company is not paying for goods or services in error, while also verifying price accuracy for valid purchases.
Accounts Payable is often the largest department within the Finance organization, though its efficiency varies greatly from organization to organization. In other words, the least efficient AP teams are five times larger than the most efficient, according to APQC.
Total cost to process a Supplier Invoice
Therefore, the best way for an Accounts Payable team to add value to the organization is to improve efficiency without compromising quality and spend controls.
Accounts Payable is at the end of the line within the purchase-to-pay process where problems collect. AP teams must fix all upstream issues to process invoices. The stakeholders involved are generally not part of the Finance team. The typical Accounts Payable professional spends much of their time gathering data and obtaining clarifications and approvals from upstream professionals that have their own priorities, which often don’t include helping AP teams perform their jobs. This follow-up work leaves less time to process invoices. AP teams that have offshored or outsourced work to lower labor costs are often frustrated when their costs don’t decrease as planned. They quickly learn that the key to efficiency is a clean end-to-end process.
For Accounts Payable to become more efficient and effective, they often must lead the charge and drive continuous improvement throughout the purchase-to-pay (P2P) end-to-end process.
A logical first step in fixing and optimizing the P2P process is to identify and prioritize pain points. They can often be highlighted by identifying the main inhibitors to processing invoices quickly without interruptions. The below illustration highlights the most common pain points:
A useful next step in optimizing P2P is to identify and prioritize leading P2P practices that make sense to implement in your organization. Take a holistic approach and consider improvement beyond “process” to include organization and technology. The graphic below provides the most common leading practices across several improvement dimensions. Highlighted are those we believe drive the most impactful and lasting improvements.
Technology and date
Process, control, performance
Organization and talent
Optimizing and automating your Accounts Payable isn’t a one-size-fits-all task, but it doesn’t have to be overly complicated either. If you’re looking for additional information on how to automate your Accounts Payable processes or are interested in learning more about our solutions to drive growth, contact us today.