CloudX Blog

Making Your Accounting Operations Lean & Mean in 2015!

Posted by Chris Cosgrove

Feb 6, 2015 4:54:06 PM

 7847797504_34f13002f2_z

 Nuf said!

 

It’s a fact, this is the time of the year when most folk’s nonchalant New Year’s resolutions are broken.  Sadly, too many folks give up on their goals far too quickly and slip back into established life patterns, whether health & fitness, financial, or work related.   To be certain, we at CloudX are much bigger fans of resolve.  Resolve is a more steely-eyed character that winners possess and is what sees them through the tough times into the fruit bearing seasons. With this as a backdrop, we want to help you improve your Accounting Operations to be lean and mean in 2015. And yes, that rhymes, and we like that too!

 

So many areas for improvement…

  

Accounts Payable automation is a broad term. That could mean front end invoice processing (ie. OCR to eliminate data entry into Accounting systems), or business rules and digital workflow solutions to mimic manual approval processes, to electronic payment automation (wires, ACH, & virtual payments). Many companies have dabbled in automation of one sort or another, but the most prevalent has to be around invoice archival and document management.  Sadly, for many folks, if this isn’t done right it ends up adding to the process without any true dynamic process benefit, but this is tangential. So the question arises…which is the right avenue to pursue?

 

That is a highly subjective topic because every organization has differing priorities, objectives, and challenges. That being said, it’s a good time to do some introspection and ultimately planning for the future state processes you’d like to see.  Part of this has to do with understanding document life cycles in their entirety and clearly defining just how much interfacing with documents drags process and hinders improvement.

 

Our thoughts

 

If  we were to prioritize a few areas as your personal consigliere, we’d say the following:

 

  1. For purely financial gains virtual payments (especially virtual MasterCard) are a highly attractive and rapidly deployable option available to AP managers with nil to nominal capital investment. Certainly there are some logistics to work out around getting credit approval in place based upon your spend and vendor on-boarding, but when you work with the right vendors for this type of solution, these considerations are largely mitigated by a holistic approach.  With that being said, there are few other initiatives that pack the financial wallop that this does, fully enabling  companies to tap into 1-1.25% of their eligible spend in the form of cash rebates. Think of recouping the cost of most AP organizations labor overhead times 5 or 6 (or more) per year! And boom goes the dynamite! This also cuts reliance upon checks which most companies are interested in getting away from for a plethora of reasons.
  2. From a strictly pain in the neck area, certainly front end invoice processing (OCR to data conversion) is an area ripe with opportunity.  Process gains in this area can be as much as 60-70% improvement along with key pickups to visibility within the process.  This in and of itself is a novelty to most organizations as it’s something that you strictly can’t experience in the confines of a burdened, manual process. The trick as they say, is in how you get to the improved state.  There are dozens of software packages from a deployed perspective that will get you close to the utopian version of an automated paper process, but these tend to be big bucks and require labor resources to deploy, customize, and manage. Newer, document process outsourcing approaches provide low-cost, high impact alternatives that the market is very receptive to and should be considered in your quest for improvement.
  3. Finally, a lesser known area that’s available for improvement has to do with AR remittance processing. This has been the domain for many banks to dabble, but this can be a costly proposition with limited domain expertise. Certainly banks have a handle on processing checks, but remittances tend to be a bit more complex than the straight forward information that is indexed off of a check.  When you start to add complexity to document processing, inconsistent or poor data can become an issue, as either one essentially defeats the purpose of the document automation in the first place.  However, in looking at transactional processes to improve, if you can tap into a DPO approach as in the AP scenario above, some really great things can happen and you can offload the burden of these tedious documents at both fractions of the original cost and time.

 

If you’re not sure what the right approach for you is, by all means continue to check out our information here or feel free to ask us!  We’re more than happy to share our insights with you and get you conquering on the shortest path to glory!

 

Free Whitepaper on Why CFO's Are Ditching Checks!

 

 

 

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Topics: Accounts Payable Automation, Improve Accounts Payable, Virtual Payments

Accounts Payable Automation Tip - Time is on my side?

Posted by Chris Cosgrove

Sep 16, 2013 10:55:00 AM

 

Accounts Payable Automation invoices gather no moss!

Accounts Payable automation invoices gather no moss!

 

The Rolling Stones are renowned as one of the longestperforming and best selling major rock bands of the 20th, and now 21st century.  With a plethora of major hits including ‘Paint it Black’, ‘Sympathy for the Devil’, and ‘Satisfaction’, it’s hard not to agree with the vast influence they have exerted upon the music industry and the global rock and roll movement over the last 50 years.  With that said, another of their famous songs is ‘Time is On My Side’, though it was a cover of Norman Meade’s original (and now more popularized work).  The cultural disconnect to ‘Time is On My Side’ has never been more prevalent in the workplace than in today’s frenetic business culture, as people cope with increased pressures to accomplish greater workloads with fewer resources in addition to integrating newer technologies to their core function.

 

Recent studies from global consultancies reflect the trend of knowledge workers increasing amount of time spent on communications, searching for, and managing information.  In a set of fairly astounding findings, McKinsey Global Institute (of McKinsey Consulting fame), cites that the average office worker now spends 28 hours a week (over 1,500 hours per year!!) writing emails, searching for information, and ‘collaborating’ with internal colleagues.  No wonder that workers feel more stressed as they set about handling their core functions, and routinely expand their workdays beyond the traditional 9-5.  Couple this with a decreased labor force, and you wind up with the common theme of individuals being tasked to do more with less, and wonder why employee satisfaction languishes today.  A microcosm of this that we routinely run across is within the Accounts Payable process and the good news is that with robust Accounts Payable Automation, it is possible to make a meaningful and impactful difference on individuals, performance benchmarks, and internal communications.

 

The Case For Intelligent Document Management

 

As outlined above, it’s evident that people spend quite a bit of time chasing pertinent information.  Overlay that with an already cumbersome manual, paper-based process like Accounts Payable, and you have the right recipe for the making of a Cat-5 Hurricane.  Because of the sheer volume of invoices, credit memos, check request forms, and other miscellaneous documents that enter the Accounts Payable process, it’s largely been an area that has been ripe for improvement for some time.  One of the key tenets of improving how companies interface with documents stems from orienting the initiative around specific process improvement.  In other words, the goal of improving how paper is managed in an organization is much more of a reality when it is anchored around a specific, day to day process, and most organizations are looking for ways to extend electronic document management solutions to impact a variety of processes and thereby reduce extraneous or redundant systems.

 

Enter Accounts Payable automation…

 

Most Accounts Payable automation projects include the following components:

 

Scanning Technology (though not always including Advanced Capture)

Electronic Document Management (On premise or hosted (increasingly))

Electronic Workflow Technology

Reporting

ERP Integration

 

Areas of increased interested with Accounts Payable automation include:

 

Vendor Portals

Auditor Portals

Automated Compliance Services (TIN matching)

Automated Expense Management Submission

Mobility Solutions

 

It’s absolutely possible to improve the search and retrieval aspects to a high volume transactional process like Accounts Payable through scanning and document management, but to improve the process from a dynamic perspective it really requires advanced capture and workflow coupled with business intelligence (rules) in order to get out of the data entry and manual routing processes that otherwise advance invoice processing.  However, for many businesses, it’s just too costly to entertain doing all of these items simultaneously, not just from a hard dollars perspective, but also from a personnel standpoint.

 

That’s why at CloudX, we see a huge future in Document Process Outsourcing, which enables folks to jump on the automation bandwagon, who may never otherwise have the opportunity to get into the automation game.

 

Only when a process is impacted at the front end, can you really get Time On Your Side by getting the time consuming elements of the process underfoot.  In the case of Accounts Payable automation, this means eliminating invoice entry to the ERP and expediting the routing process, which will otherwise bog down in interoffice mail, emails, and worse expensive couriers.

 

To learn more about ways to improve that process check out the eBook below!

Click for Free eBook \u002D 7 Best Practices to AP Invoice Automation!

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Topics: Accounts Payable Process, AP Process, Accounts Payable Automation, Improve Accounts Payable, ap automation

What To Do When Your Accounts Payable Process Sucks

Posted by Chris Cosgrove

Sep 5, 2013 7:35:00 AM

 

 Don't let your Accounts Payable process suck!

Let’s face it…self-improvement is a major industry in America today.  It seems like new diets are invented, popularized, and circulated perpetually. What was in 6 months ago is out, and what was popular 10 years ago, get modified and comes back to the forefront of public consciousness.  Contributing to the fitness craze is the whole concept that we, as Westerners, hold about our image, identity, and the race to compete with those standards.  Sometimes, that competition is a good thing, and legitimately focuses us on ways we want to improve our physical fitness by pumping iron, running longer, eating healthier, and ultimately shedding pounds and shredding down.  At other times, it creates an unhealthy obsession with unrealistic standards for our personal health and can foster complexes, especially among impressionable age and people groups, as is the case of bulimics, anorexics, and others.  With that said, Accounts Payable process improvements aren’t altogether different.

 

In many cases, as in the drive to improve our physical bodies, there is a knowing that our current state is not good, let alone optimal.  And so, we begin the quest to improve….by initially gathering information about how to improve and then progressively shaping a vision and ultimately a plan for what that improvement will entail.  This is often accompanied with a counting of the costs associated with what it will take to pull off the improvement.  For our health, it’s the cost of nutritional advice, healthier foods, personal trainers, gym memberships and the like.  For Accounts Payable process improvements, it’s assessing our state of operations, analyzing the best approach to improving them, and then determining the cost to bring about the improved state.

 

Begin At The Beginning

 

1.  The first thing to do after recognizing that you have an Accounts Payable process that sucks is to document your current state.  By doing this you can begin to pinpoint areas where there may be excessive or redundant labor steps, bottlenecks, risks or other tie-ups.

 

2.  The second thing you need to do is educate yourselves on ways to improve.  Just like you would turn to a personal trainer, instructional videos or books, you need to begin to learn about methods to improving.  We’d recommend ingesting quality e-Books or webinar content that shows how other organizations have stopped sucking wind and transformed their Accounts Payable process into powerhouses.  To get a jump on that , check out these resources here!

 

3.  The third thing you need to do is a quantitative analysis.  If all you’ve done is documented the Accounts Payable process steps without associating the cost factors that swell your CPI, then you’ve done yourself a disservice…especially if you are trying to sell this to the boss.  By all means, you’ll want to aggregate all the gripes and challenges lobbed by the AP staff and Approvers and GL Coders throughout the organization.  However, without the financial piece, your CFO or Controller is unlikely to be vastly swayed by your petitions.  With that said, when you do have the financials in place, you really have something special, kind of like the rug in The Big Lebowski, which we all know, as the Dude infamously said “Really tied the room together.”  If you have gotten shot down by Executive leadership on this before check this post out on how to succeed when pitching Accounts Payable automation.  To go a step further, we’ll happily help you pull together a Rapid AP assessment and business case if you click here!

 

Wrapping Up

 

Getting fitter is a great thing, though it certainly can become an obsession (have you ever met someone sold out to the Crossfit lifestyle…talk about committed!).  The key is coming to the realization that there is opportunity for improvement and then figuring out and mapping out the yellow brick road to the end state.  If there’s anything we could say about Accounts Payable automation projects and shaping future Accounts payable process maps, it’s imperative to put the legwork in upfront in planning and strategy, so you have a clear vision to run with.  At times, selling change within the organization can be a daunting thing, irrespective of the fiscal and productivity aspects, because people are people, and averse to change.  The good news is that that the reward for those who diligentrly overhaul and revamp their Accoutns payable process tend to have better insight, less risk, and lower invoice processing costs than their peers who stay mired under paper.

Download CloudX\u0026#39\u003Bs eBook...Uncovering the 7 Costs to Process an Invoice \u0026amp\u003BWhat To Do About Them!
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Topics: Accounts Payable Automation, Improve Accounts Payable, Accounts Payable Process, accounts payable improvement, ap automation

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