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Computerworld Singapore | June 18, 2009
Technology and accounts payable handling in Asia

In this environment, company leaders are increasingly looking to address five critical issues that surround supply management and their A/P processes.

One: How well can we manage to service level agreements to get vendor discounts?
Two: Can we track invoices through the approval cycle?
Three: Can we meet disclosure and audit mandates?
Four: How do we tailor payments to respond to current business conditions?
Five: How efficient is our exception handling and discrepancy resolution?

While there is a wide range of organisational challenges linked to A/P productivity, they can be categorised into three key priority areas: information management, automation, and business optimisation. To address their top of mind issues, companies are focusing on the following areas.

Volume and paper overload presents an information management challenge. A/P is a document-intensive function by nature. Organisations struggle to find efficient ways to manage, store, and access their high volume of invoices, purchase orders and associated documents, and find their current manual handling to be error prone and difficult to track. Most companies receive invoices by multiple means and in multiple formats; including, e-mail, fax, web forms, and most commonly as paper documents sent by snail mail. This translates to manual processing. And, as if this wasn't enough, organisations must factor in the high cost of paper document storage.

Inefficient and complex environments present automation challenges. A/P processes are complex, dynamic, and intertwined throughout an organisation. While exceptions may be few in actual incidence volume, they can be the most costly to process. Enabling A/P staff to identify non-standard invoices for additional auditing and special handling as quickly as possible is essential. Invoices are often distributed to the wrong person, resulting in additional delays in getting the invoice into the system.

Lack of control and visibility presents optimisation challenges. Managers cannot get the reports on payable status and process performance that they need to effectively manage their departments and to manage cash strategically. For example, sometimes taking discounts for early payments of invoices is advantageous, while other times keeping cash longer is more strategic. The ability to tailor payments to respond to current business conditions is critical. And, organisations have difficulty determining whether current performance meets their established service level agreements, or SLAs. Finally, providing accurate data for financial statements, and meeting the disclosure and auditing mandates for regulations like Sarbanes-Oxley is impossible without process transparency and robust records management.

What should enterprises do to address these challenges youve just cited?

The best-in-class companies weve seen that have done that successfully effected process improvements ensured they did the following.

One: assure financial transparency. Capture invoices upon arrival so there is visibility into financial liability. Delays can result in missed discounts, late fees, as well as impacted reputation. Ensure strict compliance requirements are met with KPI, key performance indicators, metric dashboards and reporting audit trails.

Two: streamline processing and approvals. Get paper off the floor and then automate approvals to streamline the process in a distributed environment. Implement key improvements that assure flexibility for centralised and combination environments as well. Automation brings consistency to multiple systems and processes that may exist in a large organisation by line of business, removing complexity and improving efficiency and overall visibility.

Three: enable collaborative exception processing. A/P core systems typically don't handle exception processing well, requiring additional labour to manually address exceptions. Focus on support for collaborative exception handling that involves efficient people, process and document interactions. These strategies can result in significant changes to the economics of key business processes.

Beyond that, what else should organisations do to bring about an even more widespread, long-term and strategic change in how they make the most of their financial resources?


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