Accounts Payable and Invoice Optimization

Your favorite AP blogger is taking a break !

2010-11-23T22:19:00.000-05:00

Hi everyone....thanks for the emails over the past few weeks. All is good on this end.

Just wanted to report that I will be refocusing my energies toward a number of dimensions of business process outsourcing (BPO) and offshoring, and therefore taking a break from my blogging on AP and invoicing initiatives.

Thanks for all of your support. I've met some very interesting AP professionals via blogging, and wish you all the best for the future !

Automation reduces AP fraud risk

2010-09-29T10:01:00.000-04:00

Really terrific article here from Graham Smith on the subject of how AP Automation can reduce fraud in the AP department. This is one of those topics many people know about, but don't talk about often.

Graham's article starts:

"...the elimination of as many human “Touch Points” in the Accounts Payable process and adherence to strict business rules is a critical success factor in the reduction of Accounts payable fraud. In short, the solution to most of today’s current AP fraud risks and processing inefficiencies involve the implementation and proper management of automation tools. A key issue in regard to most forms of AP fraud is that there are so many opportunities open in the manual process for dishonest employees acting either alone or in collusion with dishonest outsiders to defraud a company. Specifically, in a conventional manual AP function, enforcement of business rules is based on after the fact audits, whereas AP automation offers the opportunity to enforce these rules during the process...."

The article goes on to discuss very specific instances and causes of fraud...a very well-thought-out article for those of us who work towards excellence in the payables process. Check it out !

Outsourcing vs. Offshoring AP - this just keeps coming up !

2010-08-28T20:55:00.000-04:00

I've written in the past on this subject: What's the difference between outsourcing and offshoring ? Given how often I get questions or end up in conversation on this, I figured I should refresh this post. Its in the archives, and can be accessed by clicking here....

Supply Chain Finance - UK vs US

2010-08-07T07:43:00.000-04:00

Jason Busch over at SpendMatters has an excellent blog post recently regarding a topic I hear of often in discussions with senior payables and treasury managers: Supply Chain Finance (SCF). AP Automation is a foundational item for success in SCF, and hence its interest to me and other blog readers. In brief, the quicker an organization can accurately process PO and non-PO invoices, the greater the opportunity for SCF can be.

In one of my earlier posts, I discussed SCF in some detail. That post is here.

In Jason's current post, referenced here, he makes the following points:

The North American market for SCF is relatively immature
There are signs that the UK will lead the adoption curve for SCF
SCF will take on a more important role in the US as companies continue to hoard cash, and as working capital initiatives remain strong.

In the work we do, we see many examples of SCF (as Jason puts it) as "convenient extensions of eProcurement or AP Automation" programs. Our day to day work squares with his comment. But we do believe SCF can bring a myriad of opportunity to buyers (AP) and suppliers (AR) once the complexities are sorted out.

Concentra wins Paystream Advisors ePayables Excellence Award for AP Automation

2010-07-11T14:05:00.001-04:00

Last month at the 2010 Paystream Advisors Summit, Kurt Ohlenbusch of Concentra received Paystream's ePayables Excellence Award. More details on the award are posted here.

If you were at the Summit (its a great event, by the way), you had a chance to hear directly from Kurt about how AP Automation has helped Concentra meet their business objectives.

If you weren't, here are the headlines:

AP Automation helped Concentra centralize the invoice approval process across 300+ centers across the US for 50,000 invoices per month. They went from a paper-intensive to highly-automated AP process, and gained improved visibility to the nature and amount of corporate liabilities among many opportunities.

Below on the left is Kurt Ohlenbusch, AVP of Disbursements at Concentra, and at right is your favorite AP Automation blogger....

Palette signs another manufacturer for AP Automation

2010-07-11T13:36:00.000-04:00

Palette, a Swedish provider of AP automation technology to over 750 organizations in 33 countries, announced recently another win in the manufacturing sector on 28 June 2010.

Directly from Palette's website:

Rohde & Schwarz choose to automate their processes with products from Palette.

Rohde & Schwarz has stood for quality and innovation in test and measurement, broadcasting, secure communications as well as radiomonitoring and radiolocation for more than 75 years. By pursuing this four-pillar strategy, the company addresses customers from various market segments: wireless communications, broadcasting, electronics – as well as government authorities and organizations with security missions. The electronics group, with its headquarters in Munich, Germany, counts among the leading suppliers worldwide in all of its business fields. As a manufacturer of EMC test and measurement equipment as well as terrestrial TV transmitters

Approximately 7400 employees currently generate a net revenue of € 1.2 billion. A service and sales network with subsidiaries and offices in more than 70 countries worldwide helps to ensure that customers always find a Rohde & Schwarz office nearby. Exports make up about 80 percent of company business. Rohde & Schwarz Sweden AB is a subsidiary of the Group and responsible for the entire product line on the Swedish market.

Palette describes themselves as "the market leader in field of electronic processing and matching of supplier invoices. We are proud to be recognized as to having the most automated approach to supplier invoice matching and straight-through-processing".

US Firms step up spending .... higher AP volumes will follow

2010-06-28T09:38:00.000-04:00

As reported last week in the WSJ, companies are stepping up spending on capital goods, equipment, machinery and other related products. The article, here, has an excellent chart showing manufacturers new orders in May.

"We're seeing global commerce expand and as a result we want to be very aggressive in our international expansion," said Alan Graf, chief financial officer at Fedex Corp. "We're back on the offensive." The WSJ article then goes on to note that they intent to spend over $3B on equipment and facilities, with 2/3 of that for new growth. 3M and Cummins are others noted in the article as spending more this year than last.

Such increased spending translates into more activity in the AP department of these companies, as well as others following the same increased spend patterns. More spend = more invoices for that spend from the suppliers, thus more activity in corporate AP and in the field who need to approve the PO's and invoices. And with many US companies having leaned out their AP operation between Q408 until Q409, there are less now AP resources to handle that spend.

Should spend continue to grow, companies will need to look at rehiring AP professionals or investing more heavily in technology that improves throughput and keeps the costs per invoice for processing low.

CFO Magazine announces 2010 Working Capital Scorecard

2010-06-22T07:43:00.000-04:00

If you work in the finance and accounting industry, working capital was definitely on your mind in 2009. If you are unsure of the term, check out my earlier blog posts or click here. I've been beating the working capital drum for some time, given its critical importance over the past 18 months as corporates have been conserving cash while seeing their access to capital constrained (sometimes very constrained)

Each year, CFO magazine publishes the CFO/REL Working Capital Scorecard, which lays out in very granular detail the working capital metrics and results of the F1000. It's fascinating data, to see which companies sit in each quartile of performance, and how they have improved (or not) their working capital positions over the past years. The data is here.

Working capital itself will remain a critical metric of an organizations financial health going forward.

Record cash on hand - will it accelerate adoption of dynamic discounting ?

2010-06-11T13:17:00.000-04:00

As reported in today's Wall Street Journal, as of the end of March, cash made up 7% of all company assets - the highest level since 1963.

Its a fascinating article, here, describing the reasons behind so much cash on hand.

For AP departments (and providers to the AP industry as well), the notion of dynamic discounting was starting to take off, then completely dropped off everyone's radar, when credit markets froze and corporates began conserving cash as best as they could. This "cash conservation notion" brings us to where we are today - record levels of cash. But it crippled the thought of dynamic discounting being any sort of actionable initiative in supply chain or AP.

As described in the article, companies are starting to recognize that so much cash on hand depresses shareholder returns. So while cash conservation will continue, companies also need to deploy that cash appropriately.

With the favorable returns that a dynamic discounting program can generate, I have to believe this initiative could gain some meaningful traction in 2010. Thoughts ?

Can you automate invoice processing for a dollar an invoice ?

2010-06-09T23:01:00.000-04:00

It depends on a number of factors, including:

1. How an organization calculates its cost per invoice: Some organizations see their cost per invoice as the total annual AP budget divided by the total annual number of invoices processed. This disregards corporate overhead, as well as the costs of work performed in other departments in order to approve and pay invoices.

2. The scope of service required: the costs to open, prep, image and OCR an invoice are lower than those same costs plus an AP Automation application. Or for those companies who want to automatically match invoices PO's and goods receipts, the scope of service is broader (ie. costlier, given the amount of data to be captured) than for companies who have no PO matching and instead use workflow to approve invoices.

But back to the question. Yes, it is possible. And its being done today.

Zero to AP Automation in 45 days or less...

2010-05-08T23:08:00.000-04:00

Most companies would find it hard to believe that they can, in fact, stand up a sophisticated AP Automation service in 45 days or less. AP Automation projects provide for invoice imaging upon receipt, the capture of relevant invoice data, and the provision of PO-matching and/or approval workflow....all in order to improve corporate visibility to outstanding liabilities, reduce the costs of the P2P cycle, and improve compliance with corporate policies around accrual recognition and approval authority.

But one guy I know - Mike Cichy - has been involved with pulling this off at least 2, perhaps more, times in the last couple of years.

The first time was for a well-known hotel chain in the US who was sold by their foreign parent company and given 60 days to move off that foreign parent company's ERP. Mike and his colleagues helped the hotel chain scope the AP Automation project and stand it up in approx 45 days. The vendors chosen for this engagement included BancTec and their AP Master application.

The second example of properly standing up AP Automation in a very short time frame is the subject of a presentation this coming week at IAPP's FUSION 2010 conference. On Tuesday, Mike will be joined by Laura Williams of GateHouse Media as well as Tim Schmandt of Datrose to discuss a case study entitled "Zero to AP Automation in 45 days or less". Again, a component of this success story is BancTec's AP Master P2P application. Let's connect if you want to learn more about this case study, but won't be at FUSION....

Early pay discounts – they’re back !

2010-05-01T23:33:00.000-04:00

The Wall Street Journal has recently reported increases in US GDP, home sales, manufacturing output and other key indicators. Obvious signs of an improving economy. From the perspective of Accounts Payable management, we are seeing another sign of improvement: corporates willing and able to take advantage of early pay discounts are on the rise.

Last year, with corporate capital constrained and organizations conserving cash, the notion of taking early pay discounts had all but completely vanished. Almost no AP leader we talked to was talking (out loud anyway) about taking advantage of early pay discounts. But fast forward one year. The topic comes up fairly often at this point – 3 times alone last week. A clear indication that organizations are feeling more confident about their cash flows, their access to capital, or both.

In addition, with investment returns very low, and bank earnings credit rates hardly meaningful, corporates who do feel comfortable with their cash balances are taking early pay discounts since the return easily outpaces these alternatives. AP departments taking early pay discounts – they’re back.

P-Cards and AP optimization

2010-04-23T16:27:00.000-04:00

Purchasing cards have been an excellent AP optimization and cost-saving technique for over 10 years - perhaps longer. As a process tool, US corporations have adopted p-cards at an increasing rate, with over 80% of the F500 having a pcard program in place already.

In our practice, we are seeing an increasing complement of p-cards to invoice automation. Both tools reduce cycle times, increase visibility to liabilities, create process improvement, increase control, and reduce administrative costs.

I would be interested in hearing from users who have implemented both pcards and AP automation together....please let me know...

Shared Services & Outsourcing Network (SSON)

2010-03-25T13:36:00.000-04:00

Just back from the SSON show in Florida. Excellent event for Shared Services professionals, and certainly for AP professionals given AP is the most frequently included activity in US Shared Service initiatives. Some really thorough and interesting presentations from companies such as Petco, Universal Orlando and many others. For example, at both of those companies, senior leaders walked the audience through their initiatives to improve process and reduce costs in very granular detail. One of them had capital available for their initiatives, the other did not. Both identified and delivered some unique improvements in invoice automation, T/E, pcard, vendor master cleanup, and other AP processes.

next IAPP "virtual" manufacturing chapter meeting - March 16

2010-03-04T23:37:00.002-05:00

As many of you know, I co-chair this IAPP virtual chapter for manufacturers with a seasoned pro from Campbells Soup company. This virtual chapter is a great way for AP professionals from manufacturing organizations across the US to collaborate with each other without having to leave their offices.

On March 16 we will be hosting a preso and roundtable discussion on the topic of sales and use tax (presented by Avalara) in the manufacturing industry. If you are a manufacturer and IAPP member, please join us and your fellow manufacturing colleagues for this discussion....

As demand increases, so do invoice processing solutions...

2010-02-08T21:33:00.003-05:00

Great article by Mark Brousseau on the IAPP website this month....pasted below...

The economic downturn has many technology companies reeling. But you won’t find providers of invoice scanning solutions complaining. Their business continues to grow at a brisk pace:

• Bob Fresneda, president of ReadSoft North America, said his company has seen no let-up in the number of attendees to its webinars, the prospect calls it receives, or its Web traffic.

• Diversified Information Technologies CEO Scott Byers said his service bureau is seeing more demand for outsourced invoice scanning. “Companies are going paperless as a way to reduce cycle time and cost,” he said, adding that Diversified Information Technologies now provides digital invoice conversion services to roughly 10 percent of its more than 500 customers.

• Jim Bunn, national business development management, for IBML, sees increasing demand for automated invoice processing technology as part of corporate shared services initiatives.

• Paul E. Diegelman, vice president of finance and accounting optimization for BancTec, said, “Although capital remains constrained to many corporate buyers, and many companies are still in cash-conservation mode, the recent broader economic improvements have allowed both ‘lookers’ and ‘buyers’ to get back into the market for AP automation solutions.”

With new technology pushing invoice automation beyond the back office to the front lines of the enterprise, some say invoice automation could experience even faster growth in the future.

The recession as a ‘catalyst’
So why has invoice automation grown so fast at a time when other technologies are limping along?

“Economic conditions in the United States have spawned a ‘cash is king’ philosophy,” said Samuel L. Schrage, president of AnyDoc Software. “This means lengthy manual invoice processing cycles are no longer accepted as unavoidable. Instead, companies are looking to streamline their processes. The positive economic impact of eliminating manual data entry and document processing makes the AP department — traditionally dependent on manual processes and paper — a great fit for automation.”

“Prior to the economic downturn, automating invoice processing was not necessarily top of mind for most CFOs because they were focused on tasks such as compliance,” noted Andrew Pery, chief marketing officer at Kofax. “But when they looked at invoice processing, they discovered that they could achieve short-term gains by taking paper out of the process, and improve compliance in the bargain.” He noted that electronically stored invoices provide more accessibility and better visibility.

Diegelman said cost considerations are driving interest for invoice solutions from “the healthcare, consumer services and manufacturing verticals, with meaningful interest from a number of others.”

“Industries that are subject to substantial regulation and frequent audits are leading the charge for adoption,” said Jim Thumma, vice president of sales and marketing for Optical Image Technology, Inc., pointing to financial services, insurance, and healthcare. “However, as businesses in other industries start searching more earnestly for cost reductions that don’t compromise services to their customers, it’s likely that invoice processing automation will be adopted there as well.”

But there’s another reason the economic downturn has spurred invoice processing automation.

“Everyone is familiar with the ‘lower cost, increase efficiency, do more with less’ pitch, but with the state of the economy in the last 12 months, we’ve seen improved cash management as a key driver,” commented Fresneda. “Being able to accrue all expenses and know when invoices are due allows executives to manage their cash better. It also provides better visibility into outstanding liabilities.”

Bud Viancourt, director of commercial sales for Hyland Software, noted that, “one of the best, and certainly most proven, ways to maximize cash is to better control financial operations.”

“By eliminating manual data entry, accurate data is available much faster, giving companies the ability to approve invoices more quickly and make business decisions more effectively,” said Shrage.

The role of technology
Today’s leading invoice processing solutions rely on a combination of optical character recognition (OCR) engines to maximize data capture; are easier to customize according to existing business processes; and are less dependent on data capture templates, which typically provide mixed results.

A key trend in invoice processing solutions is that corporate buyers expect implementations to be far quicker and more efficient than they have been in the past. “Six months and hundreds of thousands of dollars for setup and implementation are out of the question. A compressed ‘time to value’ is required,” Diegelman said. With improved technology that allows business-user configuration, rather than costly and time-consuming IT-driven customizations, 45-day implementations that generate the expected business case are now achievable – and corporate buyers expect it, he said.

One of the advancements in invoice processing technology is the concept of cascading matching. Cascading matching is similar to traditional PO-based invoice matching, Diegelman explained, but it allows for an expanded range of data elements from an expanded range of source documents (such as contracts and approved purchase lists) to be matched during the invoice approval process. The benefit for the corporate buyer is an automated process that results in far fewer “exceptions invoices” that require manual intervention in order to complete the invoice approval process, Diegelman said.

Although it’s not exactly new, Thumma noted that more companies also are e-mailing invoices in the form of PDFs that can be stored, securely accessed, and managed within a content management system and easily pulled at the right time into the electronic invoicing process. “This helps them to deal with accountability, compliance, and audit issues, and provides efficiency gains,” he said.

Pery said new invoice processing solutions are able to automate hybrid AP environments where invoices are received as PDF attachments, by fax, by e-mail and by paper. “Paper is not going away, and most organizations don’t have the capacity, resources or leverage to implement full-on electronic data interchange (EDI). So there need to be integrated solutions that capture both paper and electronic invoices, in a single stream, with the same underlying best practices,” noted Pery.

Moving forward, Schrage believes automated invoice processing will increasingly become a viable part of business processes rather than a front-end feeder. This will drive efficiency throughout the organization, not just with automated data entry, but with a complete birth-to-death solution spanning the life of an invoice. “Interest in incorporating front-end document capture, classification, and data capture with business process management will grow in the year to come,” Schrage said. “Integration capabilities with both front-end imaging hardware, such as leveraging metadata from scanner communications, and back-end ERP and document management software, are improving, he noted.

Pery also sees a convergence of invoice processing technologies. “Customers want an end-to-end invoice solution. Companies are not inclined to acquire a capture technology from one vendor, workflow from another vendor, and somehow undertake the integration of the technologies.” This seamless integration can provide organizations with common underlying administration tools, consistent deployment, and a common user experience end-to-end, from the time the invoice arrives.

By automating accounts payable processes from start-to-finish, Viancourt said companies can achieve significant savings due to early payment discounts, reduced overall transaction costs, no more duplicate payments and better management of compliance mandates. “It also means that already spread-thin staffs can focus more on work that really adds value to the organization,” he said.

Building on demand for end-to-end solutions, Pery predicts invoice automation will move from the back-office to the fringes of the enterprise and the front office. “There is a push to truncate paper as early as possible, where the invoice is received,” he said. “Companies want to use multi-function devices and desktop technologies to scan invoices, extract line-item information, truncate documents, and feed the data as quickly as possible into the downstream workflow.” As invoice automation moves toward the fringes of the enterprise, Pery predicts mobile capture of invoices will grow.

Schrage added that more companies are investigating a shared services or centralized processing model for AP processing. “The centralized processing model is facilitated by the ability to implement distributed capture, allowing invoices to be scanned at a remote location (or many locations), and transmitted via the Internet to a central processing operation. This approach reduces paper handling, postage costs, and delays. The combination of data capture, workflow and BPM offers users a powerful new business solution that was not previously available, Schrage said.

Another trend to watch is the emergence of Web-based solutions that allow for the outsourcing of processes for correcting POs and invoices. “Let’s assume you receive a PO and the number is missing,” Pery said. “An automated solution can initiate a trigger that would send a notification back to the supplier asking them to supply the information. The solution would provide a browser-based portal for correcting and re-sending the PO. This removes the burden on the AP department of dealing with day-to-day inquiries, freeing them to focus on more complex exceptions handling.”

The bottom line
“Invoice automation is increasingly becoming a mission-critical, time sensitive, document driven business for corporate buyers,” said Pery, adding that he anticipates strong growth ahead for automated invoice processing solutions. Optical Image Technology’s Thumma agrees.

“Industry statistics show that approximately three-quarters of businesses have not yet automated their invoice processing, so there is still a lot of potential for growth,” he said. “As an increasing number of businesses add digital record keeping into the business models, it’s natural to anticipate that invoice processing automation will continue to increase steadily, as it has over the past decade.”

How can a company determine whether it is a candidate for an invoice processing solution? Bob Fresneda, president of ReadSoft North America said any of these conditions may make a company a prime candidate for this type of solution:

• It has very manual processes.
• It has very little or no control over its processes with poor visibility into those processes.
• It has low visibility into its outstanding liabilities.

“Basically, if a company is spending too much money to process an invoice compared to industry benchmarks, they would be a good candidate for AP automation technology,” said Fresneda.

Looking to the future of Finance and Accounting Outsourcing....

2010-01-28T11:14:00.000-05:00

Each year, Everest Group rallies up a group of industry leaders to discuss various themes in the outsourcing arena. The article here has some comments in regard to the Finance and Accounting discipline, where accounts payable and invoice optimization or outsourcing are delivered:

supplier consolidation
mergers of platform-based and process suppliers
more verticalization
increased buyer expectations
advice for buyers

Good article - take a look...

What to look for in an invoice scanning solution...

2009-11-24T22:14:00.000-05:00

In the Document Capture section of the November/December issue of TAWPI's Today magazine, there's a great one-page article (click here) helping AP users know what to look for when considering document imaging. Some excellent and insightful comments from a number of industry sources, including me. Have a look !

Visibility to outstanding liabilities is critical...

2009-11-21T06:14:00.001-05:00

One of the areas where corporate management sees value in AP process optimization centers around what’s called “visibility”. Visibility is a term that describes the finance department’s ability to know, with a high degree of confidence and accuracy, the nature and dollar value of invoices and liabilities that a company has incurred at any given point in time. Visibility helps management in many ways, including the following two examples:

It is far easier to calculate period-end accruals when AP knows the nature and dollar amount of all invoices received on a given date. Accrual accounting becomes “more calculation, less assumption/estimation”. Visibility reduces the cost of calculating period-end accruals and also improves balance sheet accuracy.
Finance departments always seek to forecast cash inflows (collected revenues) and cash outflows (payables, payroll, debt payments, etc) into the future. Better visibility provides improved cash management, and the opportunity to borrow at lower costs or invest excess cash at higher returns.

AP process optimization often attacks the root cause of “lost visibility” – paper invoices received in different geographical areas, departments and divisions around the company but not yet accounted for in AP. Process optimization vendors, through central receipt, front-end image and data recognition, as well as conversion to e-Invoicing, can often assist AP management achieve dramatically improved visibility in an environment that also reduces payables unit costs .

See all of my more recent posts here.

Client AP challenge: centralize or optimize ?

2009-11-17T22:50:00.000-05:00

My colleagues and I spent the afternoon with a long time client, who is wrestling with an issue: Their payables process is decentralized over 7 sites in the US feeding 2 ERP systems. They want the improved visibility to liabilities and cash flow forecasting that AP workflow provides, but can't decide whether to first centralize or go ahead and deploy workflow against the decentralized operation.

My view: Although centralization of the 7 processing sites will increase the time (and costs) to then get to workflow and its associated benefits, centralization is the foundation and first step toward their ultimate "point of arrival" where workflow generates the process benefits they seek.

Could they deploy workflow "on top of" the 7 locations ? Yes. But over the long run, centralization should have its own successful business case, onto which the workflow business case can then be layered. And that workflow business case will be much improved in a centralized environment versus a decentralized operation.

For this client, my belief is this: take the longer road, as it will generate increased process improvements and unit cost reductions albeit over a longer time horizon. Sort of like building a house - set the foundation first.

See all my blog postings here

Aberdeen Group announces top-performing e-payables vendors

2009-11-14T23:11:00.000-05:00

Kofax, Ariba, Bottomline Technologies, and U.S. Bank PowerTrack received the highest rankings in the latest e-Payables AXIS™ Report released by the Aberdeen Group, a Harte-Hanks company....

Andrew Bartolini, Vice President Global Supply Management, Aberdeen and Report Author, had this to say about the report, "In the midst of the current global recession, finance and other enterprise executives have intensified their focus on cost containment and the optimization of working capital. The A/P department is uniquely positioned to support these objectives. Unfortunately, the average A/P department lacks the automation, executive focus, and general business alignment needed to effectively do so." Bartolini goes on to say, "While A/P automation offers compelling transaction cost savings and other strategic benefits, only one-third of all enterprises have any significant level of automation in place."

According to Aberdeen's findings after evaluating over 40 e-Payables vendors, the solution providers offering the best combined Value Delivered and Market Readiness scores include: Kofax, Ariba, Bottomline Technologies, and U.S. Bank PowerTrack.

Click here to obtain a copy of Aberdeen's e-Payables AXIS(TM) Report....

Are Outsourcing and Offshoring the same thing ?

2009-10-20T12:17:00.000-04:00

From a recent post, I received a few questions that prompted me to generate this post.

Outsourcing and Offshoring are not necessarily the same thing.

Outsourcing is defined at Wikipedia as "the subcontracting of a service to a third party", while Offshoring is defined as "the relocation by a company of a business process from one country to another".

So, a company can choose to outsource something, but choose not to offshore in that process. As an example, very few companies run their own cafeterias - they outsourced that to Guckenheimer, Sodexho and others. But it's pretty hard to offshore your cafeteria (if you actually want to eat there). In the same regard, any US company (for example) with a captive Shared Service Center that's not in the US has chosen to offshore, but not outsource.

In Accounts Payable, both outsourcing and offshoring are methodologies to potentially reduce unit costs and improve processes. But they are not the same thing.

Webinar on AP process efficiency

2009-10-06T00:01:00.000-04:00

In reviewing the re-launch of the BancTec corporate site, I had another chance to review the webinar posted entitled "Increasing the Efficiency of Your Operations". The webinar is presented by a very seasoned veteran, and talks to improving P2P operations and control with advanced automation. Invoicing, workflow, automated matching and other tactics are discussed...

Matching Invoices to Contracts - Opportunity for Reduced Spend...

2009-10-03T22:17:00.000-04:00

The AP optimization software provider Palette has introduced a Contracts module, which allows AP and Purchasing to monitor terms and duration of supplier agreements. There's obvious benefit to linking AP business processes to specific terms in original supplier contracts.

A useful element of Palette's Contracts module is the ability to auto-match inbound invoices to relevant contract data elements within the matching/approval process before AP, buyers or other corporate resources have to spend time comparing contracts to invoices in the approval process.

As an example, when invoices from suppliers arrive and the buyers negotiated terms and conditions are not met, the invoices will not auto-match and the Palette application will suggest necessary and appropriate action.

There doesn't seem to be any crisp quanitifiable information about the overspend in buyer organizations from invoices that do not comply with contract terms. But a number of industry sources have intimated that there is significant savings to be realized from an automated contract-to-invoice matching process....

See all my blog postings here...

WSJ: Big Firms Are Quick to Collect, Slow to Pay Suppliers

2009-08-30T22:20:00.000-04:00

Large corporations are tightening the screws on their smaller counterparts as the credit crunch intensifies companies' efforts to hold on to their cash.

In an example of corporate Darwinism at work, the recent round of quarterly earnings results showed companies with annual revenue of more than $5 billion sped up their collection of cash from customers while slowing their own payments to suppliers....

See the complete article from the Wall Street Journal here. It's a fascinating read for anyone interested in AR, AP and working capital metrics and how they are being employed in the current economy.

See all my blog postings here.