Not unlike the American comedian Rodney Dangerfield, the accounts payable department gets no respect. Or not enough, anyhow. Why should we respect accounts payable, they’re just a bunch of pen pushers aren’t they? Well, if accounts payable don’t do their jobs well, invoices get paid Late, suppliers get mad and supply gets difficult. Or if they get paid early, there could be cash flow problems. Then the CFO gets mad.
Invoices could get paid more than once and no company can afford to be that generous.
Or invoices that aren’t tax compliant could get paid and that brings the tax collector into it. Who needs that?
And then there’s the risk of fraud. That can happen if AP aren’t watching every invoice.
The neglected department
Yet this important activity often gets scant resources and even less management attention. It is one of the few areas of business that, in most organisations, has not changed in ten years – despite the incredible advances in technology.
It isn’t just a question of improving morale in the accounts payable department. An increase in productivity can positively affect the fortunes of the entire organisation.
And if you ask, most account payables staff could tell you how to get the resources to improve accounts payable.
Most see automation as the only way to deal with increasing pressure to do more with less. And make an even greater contribution to the company’s bottom line.
So why don’t accounts payable departments automate?
Most say IT is the roadblock. But, not surprisingly, IT is in the same position of doing more with less. They have to allocate resources where the organisation believes they’re needed most.
An insoluble problem? Not really. All it takes is for accounts payable to make a sound business case for automation and find a vendor that works with IT to make their life easy as well. Fortunately, that isn’t that difficult.
Making the case
First, you’ll need to calculate the number of invoices you process per month and the number of staff required to process them.
Then get hold of the Accounts Payable Benchmark report. (That’s easy enough- just contact us! Here’s a link)
Compare the figure you got from your calculations and compare that with Level 3 (fully automated accounts payable). This will give you a good idea of your potential for improvement.
Then call in some vendors and choose one who’ll help you scope out the costs for the solution, the implementation costs and the amount of resources you’ll need to make available.
Once you have a number that makes sense (and a vendor you can rely on), go to top management armed with your information and make your case. Odds are you’ll be successful.
It won’t do to put this off. You may run out of resources to improve accounts payable in the way you recommend.
Or you may arrive at work one day only to learn that your entire department has been outsourced and you’ve been made redundant.
Think what that would do to your self-respect.