If this is a question you haven’t ever asked yourself, chances are you’re missing the boat.
In fact, I’d wager that as of right now, maybe 15-20% of the american mid-enterprise size customer has asked themselves this, which is kind of crazy, given the opportunities that exist in the Accounts Payable landscape now for total process value extraction. I get it that most finance leaders are not sitting on the dock of the bay watching the tide roll away, but the status quo must be challenged, and we’re the guys to do just that.
To the contrary of the introductory question, I’d go further out on a wager that maybe only 50% of finance leaders are asking themselves how much their Accounts Payable process is costing them. While that’s better, it’s just scratching the surface of the potential for what this process could be once fully maximized. To be sure, this secondary question is the one that should and most often does trigger the primary inquiry above, but we believe it’s time to address to both.
If you’ve only ever looked at the Accounts Payable process as a cost center and a mire of murky mess, then it’s time to consider a fresh perspective. Could it be possible to have total process visibility, with timely, actionable data, and no bottlenecks? Further, could it be remotely possible to monetize your outbound payment stream and literally create fiduciary springs in the proverbial desert? If you said no, you’d be incorrect.
Accounts Payable optimization requires 3 distinct components:
Accounts Payable Automation Software
Well, since paper or paper formatted invoices are a necessary evil to deal with, you need a means to quickly and reliably get these captured, indexed, validated, coded, approved, and submitted to your ERP. While you could go it the manual route, that would negate our earlier points about visibility, bottlenecks, etc. This is step one to slashing processing costs and getting on the road to profit center status. If you don't have it...get it!
Virtual Credit Card Payments
While checks, wires, and credit cards are the primary means by which customers pay their vendors, there is a challenging methodology in AP space that offers compelling reasons for its existence and supplier adoption. That would be virtual credit card payments, which extend the use of normal corporate cards down to even an individual, unique card account per invoice transaction. This greatly reduces fraud potential over traditional credit cards by isolating and individual payment method to a single transaction and provides a monetary incentive to the payee, by empowering them to earn cash rebates for their payment loyalty. This is novel to the method and can single-handedly transform AP from a cost center to a profit center.
In short, if AP staff no longer have to focus on menial tasks including data entry, matching, check runs, and the like, then they can divert their focus to higher order tasks that actually will benefit the organization more and provide a more meaningful and impactful job experience. While it’s not always the case that you can teach an old dog new tricks, many folks who have pursued these types of improvement initiatives have been able to pursue richer reporting functions from their department or engage their supplier base in more meaningful terms negotiations to include the pursuit of early payment discounts.
We hope you found this brief piece valuable and we love helping companies the world over challenge the assumptions that have typically defined how the Accounts Payable process is conducted. At CloudX we believe the only option is that of transforming and transcending when it comes to antiquated document processes, so more organizations can experience process maximization! If you haven't asked yourself this most important question in AP, then it's high time you do!