Optimizing back office functions – nowhere is it more necessary than in accounts payable

Companies are increasingly looking to streamline administrative functions. From CEOs to CFOs to department heads across the organization, the momentum is emerging to unlock profit and improve productivity with efficient processing, reducing costs and enabling optimal targeting of resources.

Nowhere is this more necessary than in Accounts Payable (AP), where departments manually process large volumes of paper.

The organization has grown. Mergers and acquisitions have seen the number of departments multiply. There has been business development and a change of direction, a growth in the distribution of center and office locations, an increase in the number of suppliers.

And what was an appropriate and effective system has become unwieldy, inefficient and costly, costing the business in real terms through:

• High processing costs resulting from long, manual and multi-touch checkout cycles, and include outlay of staff time / stationery, printing, and postage / warehousing.

• Penalties for late payment and interest, plus the indirect cost of being late. The loss of valuable suppliers can have a devastating effect on the business, and the loss of reputation must be considered. “We are determined to make Britain a place where delinquency is unacceptable,” said Business Minister Matthew Hancock on March 20 when the government announced details of the latest proposals to reduce the practice of delinquency. Starting in April 2016, large companies will be required to publish their payment practices, to include reports on the proportion of invoices paid beyond the agreed deadlines and late payment interest paid and owed.

• Duplicate payments.

• Staff waste time tracking invoices to answer inquiries.

• Discount for missed prepayment.

• Lost invoices: AIIM (the Association for Image and Information Management) estimates that it costs an average of $ 120 to locate a lost invoice and $ 220 to replace it.

• Creating an environment vulnerable to fraud.

In addition, there is a loss for the company through:

• The negative effect on supplier relationships.

• The staff concentrates on tasks that do not generate value and is unable to concentrate on those strategic tasks that would bring tangible benefits to the organization.

• Management lacks the visibility and control to make the informed decisions necessary to drive the business forward.

In the past, the benefits of eliminating paper from the system and automating the invoice management process were only found in large multinational and global companies. But the development of the flexibility and scalability of solutions and the modular structure of software platforms mean that Accounts Payable automation has become a viable, if not essential, option for mid-tier organizations that process more than 1000 bills per month. Processing access points on paper is wasted resources and is costly, hindering progress and reducing profits. And some of the benefits of eliminating paper and automating processing in Accounts Payable are outlined below:

• Reduced data entry and processing costs

• Reduced storage costs

• Greater visibility and control

• Improved query response time

• Duplicate and Late Payment Issues Solved

• Be able to take advantage of discounts for prepayment

• KPI monitoring

• The AP team focused on strategic tasks.