One of the cost saving benefits an Accounts Payable Automation System provider will try to sell a Company is that Accounts Payable headcount can be reduced. Be careful. This topic can lead to a change management nightmare when implementing such a System. Their knowledge of compliance, business and tax rules should be incorporated into the tool and they would be the best people to perform testing to confirm requirements have been met.
That being said, how can a Company keep the Accounts Payable team engaged in not only the project but also in performing the day to day work if they fear losing their jobs?
Or does the implementation of an AP Automation System really need to result in a reduction of force?
Consider reallocating the Accounts Payable team members to other tasks that could add value but are perpetually moved to the bottom of the priority list in a “manual” world.
- Statement Reconciliations – Does your organization reconcile Vendor Statements? Many don’t. Statements are not just about funds due to the Vendor but could also reference Credit Memos that have not been processed or applied to other invoices. Assign resources to this task to ensure funds due to the Company are recovered.
- Vendor Relationships – Addressing past due invoices listed on a Vendor’s Statement or other inquiries can strengthen Vendor Relationships. Taking the time to build and maintain these relationships can reduce a Vendor’s collection costs which can be leveraged by the Company to negotiate better product pricing. It may also encourage the Vendor to offer prompt payment discounts or accept longer payment terms.
- Compliance – Not only does Accounts Payable need to follow specific rules based on a Company’s policies and procedures, the Vendors and departments supplying invoices or other data to Accounts Payable should also be following specific instructions. Accounts Payable can work with the Vendors and others to ensure documentation and information is submitted to AP accurately and on time. Issues to consider addressing:
- Ensure the Vendors are sending invoices to the correct bill to address.
- Remind Vendors what data is required on the invoices or return invoices to Vendors that do not comply.
- Confirm the Vendor Master reflects the correct information needed to process invoices and deliver payment.
- Make sure the Delegation of Authority information is accurate and up to date.
- Track down aged unprocessed invoices to obtain the coding, approval and/or other information needed for processing so financials are accurate.
- Improvements – Are there other projects the Company would like to see Accounts Payable implement?
- ACH or other payment methods.
- Credit Card programs.
- No PO, No Pay implementation.
- Reconciliations of aged Goods Receipts, Open Payables, Outstanding Payments.
- Purchase Order and/or Vendor Master data input requirements – Is there room for improvement here that could benefit a Workflow System?
- Training – Improve the skills of the AP team members so they can better assist with other projects and related change management.
- Be ready for the growth of the Company – With growth comes more Accounts Payable transactions and possibly more Vendors. Even with AP Automation, there is still a need to manage the volumes of invoices going through the system. Retaining people already trained in the way your Company does business can have great benefits.
If part of the justification to implement AP Automation is to reduce the headcount in Accounts Payable, compare the benefits of keeping the team onboard during and after implementation to the risk of losing talent and knowledge. Ordinary attrition may get you to your desired headcount number quicker than you think and without risk, frustration or rework.
Want to learn more? Contact New England Document Systems or CS Process Flows. They have the experience, and the resources to assist you; from answering your questions about available solutions, helping you implement the right tool to project and change management. Contact either of us to discuss just how much improvement you want to see in your Accounts Payable Operation.
This article is part of New England Document Systems’ partnership with industry experts. This contribution was written by Anne Wheeler of CS Process Flows, LLC. Anne is a Consultant and Project Manager specializing in Accounts Payable processes and systems.