The primary role of an Accounts Payable Manager is to manage the company accounts payable process and function in a compliant and accurate manner. Since, the Accounts Payable Manager directs and oversees the accounts payable staff and processes associated with the payment of invoices, ensuring the accuracy of the entire process and communicating with buyers, all of it is a feat in itself. We have been analyzing what are the secrets of successful AP departments across organizations? Turns out they are not really secrets at all, but rather habits that we see across these organizations. Hence, we have listed below six winning habits of highly successful and effective accounts payable manager:
1) They improve the FTE efficiency by implementation of relevant technological software
Manual processing of the invoices raises a significant level of overhead costs and greater time complexity levels. According to a study by the Aberdeen group, a single invoice consumes around 16.3 days on an average. This drawback can be easily dealt with through the implementation of relevant technological software. It not only proves for automated processing techniques but also reduces the overheads incurred.
2) They leverage the Accounts Payable department as a strategic function rather than as a tactical function
As per the Ardent Partners ePayables study 2016; around 67% of AP departments are viewed as having “much” or “some” strategic value. Thus, we can infer the importance of AP as a strategic partner. An effective AP manager must realize this role of accounts payable in aiding a company towards achieving its financial objectives through automation.
3) They unlock the working capital tied up in the AP department by implementing prioritization policies for invoice processing rather than FIFO invoice processing
In the reports by the Paystream advisors, working capital tools are quite important for processing of invoices and various other transactions in an organization. However, delay in workflows and greater invoice cycle-times pose a barrier to such goals. This can be easily handled through the incorporation of prioritization of invoices for processing based on optimal benefit analysis via Dynamic Discounting Management (DDM), Supply Chain Financing (SCF), etc. in conjunction with touchless processing technologies.
4) They acknowledge the correlation between cycle-time and business costs
As per APQC’s Open Standards Benchmarking it has been found that companies need at least seven days, including time spent actually performing the resolution process and time spent waiting for other people to weigh in and move things forward. When APQC looked at how many full-time employees are dedicated to AP at such companies, it is found that the requirement is 21.6 FTEs or more per $1 billion in revenue. Thus, there is a strong correlation between cycle-time for invoice processing and the business costs incurred. This cost can be optimized by AP managers by the usage of Accounts Payable automation tools to make the most of staff time and keep process costs under control; so invoice errors if any, can be resolved quickly.
5) They foster visibility and collaboration between various stakeholders outside as well as inside the organization
Supplier satisfaction is of utmost importance. So also, fostering visibility amongst various stakeholders within an organization reduces the overall delay in payment processing, thus an AP manager must leverage the AP department’s role in promoting visibility and collaboration for better invoice lifecycle management.
6) They seek technology that can help reduce on costly errors
Keying errors, matching errors, and misfiled documents greatly impact the service quality and ultimately leadto bad business standards. Implementation of accounts payable process automation can help reduce costly errors and provide an efficient way of exception handling to achieve best-in-class AP standards.
If you want to know more about how technology can aid your AP department, then click the button below to find out more from Zycus’ AP automation experts