Accounts Payable Today: Making The
Strategic Shift away from Paper
Mary Schaeffer
Publisher & Editorial Director AP Now
Author Controller & CFO’s Guide to Accounts
Payable + 15 other business books
Agenda
Background: Setting the Stage
Strategic Shift: Payments
Strategic Shift: Processing
Strategic Shift: Personnel + Careers
Closing thoughts
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Setting the Stage
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Business World is in a State of Flux
Brick and mortar to web based
Publications and advertising moving from print to online
Computers, software
Mainframe, networked PCs
Outright purchase of software SaaS
Cloud based applications
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Accounts Payable Is Part of
that Transition
Three Stages:
Moving away from paper checks to electronic and p-
card payments
Moving away from paper invoices to an automated
processing
Moving away from transactional to analytical staff
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Functionality:
Part of the Bigger Picture
Not an island
Must integrate into the bigger Picture
Purchasing
Tax
Accounting
Treasury
Audit
Take a customer service attitude
The Other Big Change
The ugly reality of:
Ruthless cost cutting
Expense reduction
Headcount scrutiny
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Strategic Shift: Payments
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One of the Biggest Headaches in
Accounts Payable
The Paper Check. It is:
Expensive
People intensive
UP issues
A Problem creator
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Alternatives to the
Paper Check Nightmare
P-cards
ACH (electronic payments)
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Challenges with the Payment Shift
Supplying the remittance data
Cash application on the part of the
vendor
Controls when ACH payments made
outside AP
Strategic Shift: Processing
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Root Cause of Headache on the
Processing Side
Invoice
Processing
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A Few of the Problems
People Intensive … expensive
Human keying errors
Invoices lost in the mail (really)
Invoices addressed to no one
Invoices floating around the company
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And More Problems
The storage issue
Lost early payment discounts
Late fees
The he-said-she-said approval problem
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Result of These Problems
Manual invoices processing is:
Expensive
Error prone
Introduces delays as errors create additional disputes which must be resolved
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What to Do???
Solution: Automate
Where do you get started
But what about the expense?
What about the staff?
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Dipping Your Feet
into the e-Waters
Accepting invoices by email
Accepting invoices by e-fax
Sending remittance information for ACH by
Online T&E
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What about the Cost?
No huge up-front investments
Money
Manpower
Time
Pay as you go (SaaS)
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Where Do The Savings
Come From?
The obvious
Reduced processing costs
Fewer people processing invoices
Lower storage costs for hard documents
Not so Obvious
• Fewer duplicate and erroneous payments
• Fewer errors
• Easier access to information
• Less time with Auditors
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Can We Talk about the Cowboys/gals?
Visibility into maverick spend
Purchases at vendors who are not on the preferred vendor
list
Sometimes indicates possible fraud
Sometimes just got a better price
Items that shouldn’t have been purchased in the first place –
or by the person who did the purchasing
Best example: computer/technology purchases not made by IT
Dollar amount above approval levels
Can slip through in a manual process
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Approvals Time
Legitimate Delays
Mail Time (Post office)
Interoffice mail time
If scanning, scanning delays
Vacation/unplanned absences
Unreasonable Delays
Approver has more important things to do
Approver doesn’t like reviewing invoices
The Other Big Fight: Who Gets the
Invoice First
Did we get the invoice yet?
First question on those ‘Where’s My Money Calls’
Accounts Payable or Purchasing???
Home office or the field?
Should AP be centralized or decentralized?
With an automated solution, everyone has visibility into the
data so it almost doesn’t matter
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Automatic Escalations
• Approval time preset – say five days
• If no action taken, invoice ‘escalated’ to the next level
• If no action taken after agreed amount of time, say five days, escalated to the next level.
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Big Benefit
Strategic – Accounts Payable
automation frees you and your
staff from mundane tasks, giving
you more time to focus on your
business.
Strategic Shift:
Personnel + Careers
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The Elephant in the Room Issue
What about the staff
who used to process invoices?
Will different skillsets be required after
automation?
What can I do to get ready?
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The Staff
Yes – fewer will be needed to handle invoice issues
Dispute resolution will become more important
Retrain to handle other value added tasks including:
Master Vendor file cleanup
Statement reviews for open credits
In-house duplicate payment recovery
Improved Regulatory compliance The IRS
States
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Staff Not necessarily about headcount
reduction
About creating a more
effective AP function
Regulatory compliant
Fraud resistant
Staff can work on those back-burned
projects
If they have the needed skills
AP can take on additional
responsibilities
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Skills Needed in an Automated AP World
Analytical rather than transactional
Dispute resolution
Good customer service
Knowledge Regulatory issues: 1099, 1042, Sales & Use
Tax, Unclaimed Property, Worker Classification etc.
Accounting (not just AP issues) and GL
Purchasing, Treasury
Writing, public speaking (PowerPoint)
Excel, Access, Pivot Tables
AP: Yesterday vs. Tomorrow
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The AP Function of the Future
Changing
New skills will be needed if you wish to be a strategic part of this shift
Your Challenge:
Keeping up
Making sure you are ready
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Thank you/Questions
Questions always welcome.
To share your thoughts and insights
Mary Schaeffer
302 836 0540
Sign up for our free weekly ezine at
www.ap-now.com/ezinesignup.html
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About Mary Schaeffer
Mary Schaeffer is a nationally recognized accounts payable expert. Following a career in finance she turned to writing and consulting. For the last 15 years she has been researching and writing newsletters for the accounts payable profession. Currently she is the Editorial Director & Publisher of Accounts Payable Now & Tomorrow, (www.ap-now.com) a fee-based newsletter published by CRYSTALLUS, Inc.
She also handles most of the firms consulting assignments (focused primarily on AP issues) often working with other well-regarded professionals. Her blog, at http://ap-now.com/blog/ is read by over 15,000 professionals each month.
Ms. Schaeffer is the author of over 15 business books including The CFO and Controllers’ Guide to Accounts Payable and the recently published Fraud in Accounts Payable: How to Prevent It. John Wiley & Sons is the publisher of most of her books.
She also is a regular contributor to the AICPA’s Corporate Finance Insider.
Ms. Schaeffer has a BS in Math from York College (CUNY) and a MBA in Finance from New York University.
She can be reached at [email protected]
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Let Go and Gain Control
Visit www.anybill.com/ today!
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