CloudX Blog

Bridging AP Automation Communication Barriers Between Finance & IT

Posted by Chris Cosgrove

Apr 16, 2013 4:40:00 PM

 Getting rid of AP Automation communication issues between departments is clutch!

That Dog Ain't Gonna Hunt!

One of the most critically acclaimed World War II film productions has got to be Band of Brothers, produced by HBO in 2001 and based upon the same-titled best selling book by fabled historian Steven Ambrose.  In the initial episode, a classic prank is pulled by an entire platoon of soldiers upon their over-bearing and heartless company Captain as a means to show their disapproval of his leadership and decision making process.  One of the soldiers, Sargent Donald Malarkey, tricks Captain Sobel into thinking that Malarkey, who is unseen to Sobel in the woods, is actually his commanding officer.  Malarkey, using master impersonation skills directs Sobel to cut cow fences in order to advance the progress of his platoon much to the delight of his comrades.  In it he uses a fantastic expression to convey the fruitlessness of Sobel’s command decisions stating that “that dog just ain’t gonna hunt!”, and in so-doing compels him to take an action that ultimately mortifies him in the sight of his peers.  Now with that said, you really need to see it to enjoy it, but it serves a purpose for our conversation today.


Sometimes it’s evident as we approach systems implementations and vendor selection processes that certain dogs ain’t gonna hunt.   A perfect example of this just happened in the course of our conversations this week with a potential customer.  Now up to this point we’ve discoursed extensively with their Finance leaders and Accounts Payable staff, though when the subject Accounts Payable automation project was broached with their IT leaders, all of a sudden alarm bells start going off, which is interesting but hardly surprising. 


Some of the common concerns tend to lie in a few repetitious areas:

  1. We’ve already invested in systems (let’s say document imaging to continue with the exact scenario).  To be sure, extending systems that are functional and provide business advantage is highly to be desired.  No CIO in their right mind is going to want to bring in a redundant system.  But to quote Shakespeare…there’s the rub!  In the situation that unfolded today, it became very evident that when one department is speaking apples, another department is hearing oranges.
  2. We’re overburdened with other projects.  Not to say that this one came up today, but it is to say that it underscores the need to stack rank and score projects based upon fiscal impacts, investment requirements, achievability, timelines, and resource constraints.  More on evaluating projects here!
  3. This has to integrate to our core systems.  This really shouldn’t come as a revelation, but it’s a requisite for any sound-minded corporate leader.  Of course new systems have to work together and that is precisely why integration shops that tie core systems together do so well. Just look at all the development activity around platforms like Salesforce, SAP, & Oracle.


The question is why is IT often viewed as the buzz-killer of project deployments, when they are the very linchpin in many cases for managing projects and making systems work.  


To be sure proposing  Accounts  Payable software deployment is a heady subject and one that requires extensive planning and expertise to execute upon.  That being said to point #1 above, and the whole apples vs. oranges issue, in the case of our the client discussion today, it became evident that IT really had no working understanding of the intricacies of the Accounts Payable process.  Now, it’s understandable in their particular context, being a large hospital and as we’ve covered in our Healthcare eBook here, that IT spend and attention typically gets diverted to clinical systems (EHR, digital radiology, etc.) as opposed to back office.  But more to the point, there was a complete lack of awareness of invoice processing and the requisite data entry, validation, routing, and exception handling components.  Invoices are, as you well know, transactional documents that require interaction, not just some static data carrier that can just get plunked away for safe keeping.  Ironically, this type of an approach (archival) without addressing the processing issues, really doesn’t improve the AP process, and actually ends up adding costs to the process.


So, as a response to this our recommendation is to always clearly define and articulate the scope of new projects along with providing compelling business cases and benchmarking studies to determine where you are prior to an initiative and thereby create a vision for the improved state.  Typically this, along with an educational component, or should we say interpretation process, can help make sure that the items in discussion are meaningful to all parties, especially those who may not have subject matter or process expertise.



To learn more about Accounts Payable best practices and whether cloud based AP software is right for you, check out the eBook below!

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Topics: Accounts Payable Process, AP Process, Accounts Payable Automation, Improve Accounts Payable, ap system, accounts payable software, Invoice Processing, accounts payable best practices, ap software, accounts payable outsourcing, Accounts Payable Solutions

3 Ways That Your Accounts Payable Software Makes Forecasting Better

Posted by Chris Cosgrove

Feb 21, 2013 1:18:00 PM



So you're a Finance leader these days in the midst of turbulent economic conditions that are unprecedented...what's the deal with forecasting?

Economic worries abound, supplier pricing is rising, political volatilities contribute to uncertainty, transportation costs are skyrocketing, and investors want more insight into your organizational financials...sounds terrific, sign me up.

In a recent Wall Street Journal Article, it was noted that 'Companies offer fewer details about their outlook', and that they 'seek to 'manage expectations' – Trying Times For Forecasting, Wall Street Journal, October 1, 2012.  This is largely due to the global economic uncertainty mentioned above and as a result many CFOs have adopted broader variances than previously in their reporting functions to analysts and shareholders.  There is also a growing trend of CFOs that have abandoned or curtailed the practice of forecasting, with the article noting a drop from 85% to 76% of companies providing financial insight over a period of three years.  This issue is certainly a cause for concerns for analysts and shareholders alike, who rely on accurate reporting data to value companies appropriately.

With that said, it's opportune to look to your back office functions, especially AP (2.0 that is), as an area to mine rich reporting data from a spend perspective.  This is infeasible with legacy technology and processes, however.  Often, AP invoice and pipeline information sits in silos (or on people's desks/inboxes)  without being addressed in a timely fashion.  Without having visibility to that're already behind the eight ball in terms of being to forecast with any degree of ease and accuracy.  On the other hand, if you are one of the smart cookies that has recognized the value to automating your Accounts Payable process, then there is a good chance you are reaping the fruit of your labors.  No one said that Accounts Payable automation is easy, but the juice is worth the squeeze when done right.

Here are three ways that Accounts Payable software will make forecasting easier for you, and your analysts, shareholders, board, and organization happier: 

1. With invoices converted to data via smart OCR upon receipt, you have usability of the data to drive the process.  With the Accounts Payable process expedited, you can begin to turn invoices around quickly and eliminate late payments...bonus!  The bigger opportunity here is to capture more early payment discounts...double bonus!  An interesting note in Aberdeen's AP Invoice Automation in a Networked Economy - May 2012, show's that there is a difference of 73% rate of capture for companies who have automated (91% early payment discounts captured :) ) their AP vs. those who have not (18% :( ).  Faster invoice processing means better access to near real-time info, and real time info is the crux of accurate forecasting.

 2. By deploying an electronic workflow solution, you can eliminate internal bottlenecks and identify choke points to your approval process.  This also can contribute to faster payment turn-arounds, increased discount capture, and linkage across departments.  Think about it, you're effectively getting out of the paper pushing business and integrating procurement, finance, and the various approvers throughout your organization, you facilitate better shared intel between departments and promote inter-departmental collaboration.  Also, by getting visibility into process outliers (invoices in approval land that may be stuck in the process, you can more accurately accrue and forecast pending spend).


3. With usable data and imaged invoices, you can have immediate, dynamic insight to your spend.  Period.   With that accomplished, you can quickly and easily prioritize invoices for payment, manage supplier relations better, and account for your AP transactions and pipeline instantly

With advanced technology solutions in place to help you with invoice processing, you can get a firm grasp on forecasting, as indicated above.  However, besides making your life easier and more productive, the real boon with Accounts Payable automation is the added benefit of being able to reap profit where it simply was impossible before.  The two primary ways profit is generated through a successful AP automation initiative are by way of processing cost reductions (you’re invoices fly through the process now instead of limping) and by capturing more supplier discounts.  Interestingly, the discounts are usually a multiple of the cost reductions and really add the icing to the cake.

If you’re looking for ways to improve your AP process so that your forecasting woes can be gone and you want to learn how to make your AP system profitable and more strategic, you can learn more in our eBook on 7 Accounts Payable Best Practices to AP automation, here.  Also, you might want to consider improving your efficiency through Document Process Outsourcing & AP services.



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Topics: Accounts Payable Process, AP Process, Accounts Payable Automation, ap system, accounts payable software, Invoice Processing, Accounts Payable Solutions, ap services

Accounts Payable Process - 9 Ways To Slash Costs Quickly

Posted by Chris Cosgrove

Feb 5, 2013 7:42:00 AM

Slashing Accounts Payable Process Costs Rocks!

According to recent economic data, the road to recovery for the US economy is still fraught with uncertainty and less than optimal results. 


The tepid recovery that has been underway for sometime appears to have stagnated, with actual GDP contraction in the fourth quarter of 2012.  Some economic experts anticipate more of the same in the first quarter of 2013 with results essentially being neutral and according to others, even indicative of recession level benchmarks.  With that said, many organizations are also bracing for rising tax burdens, healthcare costs, and pension liabilities.  So, as a means to foster improved organizations fiscal health, we wanted to contribute 9 ways to reduce cost in your AP process.


Here’s a recession busting list of 10 Account Payable best practices to make AP more profitable and better the financial health of the company simultaneously!

  1. Pursue AP Automation through cloud initiatives.  This will help you cut processing costs by eliminating data entry and manual workflows.  Cloud infrastructure generally represents a potent alternative to traditional Accounts Payable software system deployment and is typically not shackled by high investment costs to deploy.  Also, cloud delivery often reduces the amount of IT resources and time required to support systems, making this appealing for companies from SMB to Fortune 500 level.
  2. Adopt electronic payment alternatives and incentivize your suppliers to accept e-payment methods.  Accounts Payable solutions for payment include P-Card, ACH, e-Invoicing, & many more.  According to The Accounts Payable Network benchmarks, it can cost upwards of $5 to process a physical check.  As a stark contrast in cost, ACH transactions cost under $1.50 to process.  That represents close to a 70% savings in cost, not even factoring the time impacts of electronic payment compared to traditional methods. 
  3. Centralize AP Invoice Receipt – Many organizations with broad geographic footprints have a difficult time getting invoices into AP directly and in a timely fashion.  This is also true for organizations that have multiple business units, with invoices coming into the business unit first and being forwarded to AP from there.  Whenever possible, centralizing the invoice processing function to a standardized and centralized approach will result in consolidation benefits.   This is also being rapidly enabled through flexible capture solutions.  By leveraging investments in multi-function and even mobile devices, you can now onboard AP documents from virtually anywhere.
  4. Ditch using Checks for Employee Reimbursement – Similar to getting vendors set up on electronic payments, printing check for employee reimbursement is costly, paper burdened, and inefficient.  Explore Direct Deposit alternatives to get them their money quicker, easier, and at a reduced transaction cost to yourself
  5. Collaborate With Procurement To Increase Early Payment Discount (EPD) Capture – Companies of all sizes are being disaffected by challenging economic conditions.  This creates an opportunity for those who can turn invoices around quickly and execute early payments.  By working in conjunction with Procurement to negotiate supplier discounts and then executing invoice processing and payment within AP, EPD’s can quickly become the biggest financial contribution AP can make on organizational performance. P.S. AP departments that automate their processes capture 90% of available discounts, compared to those who don’t who get only 18% of what’s available according to Aberdeen data by the way!
  6. Deploy Fraud Detection Technology – By looking for fraud within AP, companies can often cut down on funds leaking out of the organization.  Simple items like stopping duplicate payments can significantly contribute to errant or even malicious cash outflow.
  7. Improve AP Productivity Through Dash(Score)Boards – When benchmarking AP productivity and monitoring KPI’s in a public space, two things occur; 1. You establish a framework for performance, and oftentimes AP staff will strive to improve their productivity.  2. You can create a platform to create organization awareness to how AP is contributing to organizational health and fiscal performance.  It’s kind of like the difference between someone who goes to the gym to socialize and the personal trainer who meticulously records performance levels while helping their mentees shatter performance barriers.
  8. Transform AP Staff From Mundane Work to Strategically Valuable Work – Part of this has a lot to do with removing big rocks (obstacles) from the process…data entry, manual validation, paper processing, etc.  When you do that and start to consider AP as a customer service position internally and externally in conjunction with a department that has significant ability to improve financial performance, hedge risk, and provide dynamic reporting, you realize that AP can make a significant difference as a valued resource to corporate performance.
  9. Consider Using Accounts Payable Audit Services – In many organizations, Credit Memos are processed incorrectly, Duplicate Payments occur, and a host of other issues transpire with respect to incorrect transaction bookings.   Contracted AP recovery audit firms can help recover misappropriated or unclaimed funds usually on a contingency basis.

To identify other ways to reduce cost in your AP process, it’s a good idea to know the costs that abound within the invoice approval process.  Check out our eBook on Uncovering the 7 Costs below!

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Topics: Accounts Payable Process, AP Process, accounts payable software, Invoice Processing, accounts payable best practices, ap automation, Accounts Payable Solutions, accounts payable audit

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