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Accounts

Payable

In short, accounts payable’s job is to pay suppliers and keep them happy, at the lowest cost to the business. The bulk of Accounts Payable work is processing invoices to ensure that payment terms are met. This also means routing invoices appropriately for approvals and exceptions handling.

 

Some standard KPIs for Accounts payable can be:​

  • Cost per invoice - £

  • invoice cycle time - days

  • invoices processed per FTE per month

  • invoices processed straight through

  • Exception rates (invoices with at least one discrepancy)

How Accounts Payable deliver more value than simply paying suppliers

 

A good Accounts Payable team can deliver further value by identifying cost savings, for instance discounts or rebates for early payments - while also identifying which invoices are best paid according to the agreed terms.

If these actions are done efficiently, AP can then focus on the really valuable, strategic work to optimise working capital.

Why most Accounts Payable teams don’t deliver the value they should

 

Sadly, many businesses don’t get the best from their Accounts Payable team, because they are bogged down in too much manual, time consuming work. This stops them from supporting the business to optimise working capital.

 

The root cause for most performance challenges is the lack of standardisation. Any suppliers that don’t use e-invoicing create a surprising amount of manual processing to manage lots of disparate information from different sources, through different systems and channels.. affiliates, suppliers, emails, phone calls, attachments, PDFs and forms.

 

The checking process is also often painfully manual:

  • are invoices accurate?

  • were the services or products delivered to the end user’s satisfaction?

  • does the invoice match the price of order?

  • was the purchase authorised?

  • does the purchase fall within budget?

 

And then there’s further processing actions that are needed: Information has to be collected, interpreted, understood, queried and re-keyed so it can be used and shared in a standard, workable format in the business. 

At the same time, Accounts Payable teams may also be fielding other non-standard but valuable and important work such as enquiries, cancellations and complications. When this competes with day to day work, some elements of the job will suffer.

 

Even when technology is bang up to date, every accounts payable team has a number of moving parts and non standard information, which makes this function almost impossible to scale or speed up without dramatic loss of accuracy or effectiveness.

A sub-par Accounts Payable department impacts the rest of the business

 

If left alone, Accounts Payable’s juggling act can lead to serious complications such as:​

  • Lack of fidelity of information, which means the business lacks complete clear and up to date accounts payable information

  • Delays and errors which impact the business’s interactions with suppliers. Poor supplier experience can lead to poor supplier relationships and less favourable financial terms.

  • Disputes and cancellations

  • Poor working capital management and lost business opportunities

Approaches to improve Accounts Payable performance

 

Option 1: Intelligent interventions

You can start by assessing what elements of your Accounts Payable are underperforming, what is the cost of this underperformance to the business, and start with the highest priority issue.

 

In essence the steps to take are ​

  • map formats

  • map variables

  • map error checking

  • map communication flow

  • incentivise staff to carry out onerous tasks quickly and efficiently

 

Option 2: Digitalisation 

The alternative is to have the manual and repetitive tasks automatically performed by software robots. This will leverage Account Payable’s performance by identifying what is best to automate and freeing up the team to use creativity and problem solving on valuable areas of the business.

Automation works by using smart rules. This ensures the right information is used at the right time - for instance updating the client. There’s no code and no laborious process mapping.

 

Software robots can scan, index, manage and pull data from various communication channels, then communicate and update customers in real time. Automation, as opposed to other improvement approaches can be deployed in days, not weeks, and achieve an ROI in months. Any tweaks and fixes are done in hours, not days or weeks.

 

The benefits of digitisation are striking

  • increased speed 
  • reduced processing costs

  • reduced onboarding and training

  • improved quality and consistency

  • adherence to business policies

  • 24/7 processing

And most importantly, human resources are freed up to deal with complex nuanced problems and other value added activities that drive supplier satisfaction and retention.

Decide Your Best Approach

The SoftBot No-Code RPA Platform

SoftBot's no-code Robotic Process Automation (RPA) platform lowers economic barriers to entry, enabling small and medium-sized businesses (SMB) to access a low-cost Digital Workforce that scales with your business needs; ensuring that you achieve an ROI within months, not years. Available as standard for deployment on-premise or in the cloud.

The SoftBot platform enables quick, agile implementations through rapid iteration of a production system. That means it will be deployed in days, not weeks. There is no need to write code to tell the Digital Worker what to do; and if an omission needs to be fixed or an improvement made, it only takes hours not days.

SoftBot's no-code Robotic Process Automation (RPA) platform will orchestrate the tasks to be executed within the business across the available workforce. This orchestration also manages escalations and exceptions. The typical benefits of this are:

  • Speeding up of individual task performance

  • Greater transaction throughput

  • Improved quality of results

  • Real-time monitoring of performance

  • Measured and controlled business processes (CMMI Level 4)

  • Data collection for business process improvement, providing the foundation for CMMI Level 5 - Optimising.

The combination of orchestration and automation has the possibility of delivering a whole that truly is greater than the sum of the parts.

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