The Top 10 Mistakes in Accounts Dean Baxter Sales Director

The Top 10 Mistakes in Accounts
Payable and How to Avoid Them
Dean Baxter
Sales Director
[email protected]
EPP Challenges in Organizations
Control &
Cost Savings
Approval policies
not followed
High cost
of accounts
Personnel waste
time on
No records of
invoice history,
no audit trail
Cash discounts
unused, late
payments boost
unnecessary costs
More time needed
for value-added
No real-time view
on cash flow
Best practices
in AP process
not known or
Overall process
of compliance
with SOX, IAS...
The Top 10 Mistakes in Accounts Payable
And How to Avoid Them
Shuffle Paper for Approval of Invoices
Shuffle Paper for Invoice Approval
 Photocopying of Invoices
 Tracking of Invoices in Process
 Faxing of Invoices
 Temporary Filing of Invoices in AP
Pay Late Fees or Not Take Advantage of
Favorable Early Pay Discounts
Invoice Processing Cycle Times
Cycle Time (from
invoice receipt to
payment scheduled)
All Others
Overall invoice average
5.8 days
14.1 days
6.0 days
11.2 days
9.4 days
16.6 days
Source: Aberdeen Group: The CFO’s View of Accounts Payable: Cash is King.
February 2009
Not Having Visibility of Unrecorded
Unrecorded Liabilities
 Not Able to Perform Accruals on Actual Liabilities
 Creates Cash Flow Management Challenges
 Reporting Issues
 Reporting on estimates
 Adjusting based on actual
Cash Management Report
Believing EDI or e-Invoicing is the Path
to an Immediately Paperless AP process
EDI or E-invoicing=Paperless??
 EDI is a Recommend Format not a Fixed Format
 EDI Typically Requires IT Involvement on Both Sides
 e-Invoicing
 Vendor Portals Work When Vendors Produce Small Volumes of Invoices
or High Dollar Invoices
Spend More Processing an Invoice
Than the Amount of the Invoice
Cost per Invoice: Aberdeen Group
Source: Aberdeen Group: The CFO’s View of Accounts Payable: Cash is King.
February 2009
High Cost of Processing an Invoice
 Courier Costs
 Manual Data Entry
 Manual Matching
 Manual Exception Handling
 Manual Approval
 Labor Spent Tracking Invoices Internally
 Responding to Vendor/Internal Requests
Be Involved With Why the CFO
is Walking Out in Handcuffs
Audits and Compliance
 Must Have an Auditable and Repeatable Business Process
 Auditors Always Seem to Want the One Invoice You Can’t Find or
 Fraud
 Store your invoice, check images, or remittance documents in
multiple locations or media making audits painful and expensive
Neglect to Coordinate with Finance,
Procurement and IT
Stakeholder Interests
Line-of-Business Budget Holders
Getting things done, quickly and
Obtaining necessary items
Accessing up-to-date information
on one’s own requisitions
Tracking business performance
Achieving complete spend control
Enabling real-time budget follow-up
Spend and category management
Contract management and use
Eliminating maverick buying
Streamlining standard transactions
Gaining real-time data on spend
vs. budget
Transparent reporting
Minimizing manual work,
automating invoice handling
Successful implementation requires addressing the interests of all stakeholders
Failure to Coordinate
 Disjointed Processes
 Longer cycle times and more exception handling
 In-fighting and finger pointing
 Systems that do not communicate
 Vendor relations can suffer
Become a Call Center/Service Center
for Vendor and Internal Requests
Call Center/Service Center
 Interrupts the Core Work of Accounts Payable Professionals
 Typically Requires Research and Then an Additional Follow Up Call
 Even Research Does Not Always Answer Request
 If the invoice is not in the AP process it is difficult to locate
Personal Archive for Reviewers/Approvers
Supplier Portal for invoice and payment
Have Company Operations Interrupted
or Halted Due to Non-payment of an
Core Business Interrupted
USA TODAY January 1, 2008
Core Business Interrupted
 Production Stops
 If required goods and services being provided by vendors are placed on
hold it can cause down stream issues.
 Missed Revenue
 Gets Executive Attention Fast
Manually Enter Invoice Data
Into Your ERP System
Manual Data Entry
 High Cost to Manually Enter Required Fields
 Most organizations do not capture line item detail due to this
 Accuracy Issues
 AP processors Least Favorite Task
Possible Solutions
Possible Solutions - Imaging
 Scan the Invoice as Early as Possible
 Distributed or Centralized
 Leverage Existing Technologies for Capture
 Multifunction Copy/Scan/Fax devices
 Creates Immediate Audit Trail
 OCR (Optical Character Recognition)
 Significantly Reduce Data Entry
 Increase Accuracy
 Outsource the capture process
 Many providers are high volume “machines” that provide quality work at
reasonable prices
Possible Solutions – Paperless Invoicing
 Work with Large Volume Vendors to Create Connections
 e-Invoicing
 Vendor/Supplier Portals
 Easy to implement if you are a Fortune 50
 Works well with small suppliers or large $ invoices
 Work with an e-Invoicing Network
 Takes time to create a substantial volume but is cost effective
 Network provider perform all the hard work
Possible Solutions
– Workflow/Content Management
 Facilitates Routing of Invoices
Cash Flow Management
Automated Matching
Exception Handling
 Review processes very carefully
 Creates Audit Trail
 Electronic Stores Invoices and Supporting Docs
 Eliminate Paper Filing
 Allows Business Users to Retrieve Invoices
Basware in Brief
Basware in Brief
A Global Leader in Enterprise Purchase to Pay solutions
Established in 1985
1,500 customers and 1 million users in 50+ countries
Public company with rapid and profitable growth
Purchase Management, Invoice Automation and Document Archiving Solutions
2009 revenue of $140+ million
Over 800 employees worldwide
AAA D&B Rating
Listed in Deloitte’s Fast 500 Technology Companies
Global coverage with operations in North America, Europe and Asia-Pacific
US headquarters in Stamford, CT and offices around the USA
Partners across USA
Certified SAP, Oracle, and Microsoft partner
Basware EPP environment
Basware Connectivity
Supplier Catalog
Purchase Message
Scan and Capture
Invoice Automation
Customer Legacy Systems e.g. Financial Systems, ERP
KPI Measurement and Continuous Improvement
Forrester Wave™: AP-EIPP, Q2 ’08
Basware North American Customers
BasWare Enterprise Purchase to Pay
Dean Baxter
Sales Director
(339) 293 9970
[email protected]