When talking about accounts payable, the analogy of an oil leak in your car is often useful. You're driving around thinking everything is okay, not realizing that a steady drip of oil from your vehicle is wasting resources and is going to hit hard when your motor finally blows.
Every day, leaders across industries in purchasing, disbursements and accounts payable are challenged to locate, stop and even reverse the steady leak of money leaving their organizations due to overpayments, duplicate or erroneous payments, or outright fraud. Too often, their efforts are stymied by the lack of a clear plan or goals. There can also be a reluctance to take the necessary steps to get their house in order, particularly when there are numerous other projects underway.
Leading accounts payables organizations are able to undertake these improvements (either through services or technology solutions) in parallel with other company initiatives. Managers erroneously think it's going to involve a huge commitment of time and resources to improve their processes. While there's certainly effort involved, it's rarely, if ever, on the scale people imagine it will be.
Today's advancements make it easier than ever for companies to reverse the trend of money leaking away from their company. In addition, the return on investment of these improvements is almost always very compelling.
Below are six processes your AP department can use to establish internal AP controls and save costs, improve performance and achieve full ROI.
(1) Reclaim Lost Revenues With a Recovery Audit. Accounts payable is ripe with opportunity for error and fraud--and for recovery. A recovery audit is an after-the-transaction event that examines everything from pricing, shipping and currency errors to improperly applied taxes and missed cash discounts. The audit serves a two-fold purpose. One is to reclaim lost revenue. The primary benefit of a recovery audit, however, is the roadmap it provides your business to improve operations and shore up internal controls. The ability to take specific actions to stem further loss with proven prevention tools recommended via the audit more than recoups your time and financial investment in the process. In fact, the insights gained from a recovery audit can facilitate proactive controls and process improvements that reduce friction in the supply chain between buyers and suppliers. Leverage of analytics and automation, including predictive analytics, optimizes the...