Cost Reduction and Control Best Practices: The Best Ways for a Financial Manager to Save Money, 2nd Edition

Chapter 8

Accounts Payable Costs

BEST PRACTICES

TACTICS IN ACCOUNTS PAYABLE DEPARTMENTS

The tactics that managers in the accounting function use to streamline payables processing now vary sharply with company size. This is a key finding in an IOMA survey in which respondents identified “the most successful changes implemented in the payable department.” Altogether, IOMA asked roughly 500 participants to identify up to five changes that yielded a “success” in payables. Interestingly, respondents at all five employment levels in the survey cited one tactic—improve accounts payable (AP) systems and procedures—as their most successful change. In this annual survey, which IOMA began in 1995, this broad-brush tactic has always topped the charts.

Size Matters

At the same time, this survey shows that the “success” managers in accounting have with these 21 change options vary with company employment levels. For example:

• New technology: 53.8% of respondents at companies with 5,000 or more employees had “success” when they used new technology to increase productivity. This is exactly twice the 26.9% success ranking at companies with fewer than 200 employees. In the 12-month period of this survey, larger companies invested more heavily in improving payables technology.
• Procurement cards (P-cards): 25.6% of large-company respondents had success in this 12-month period when they began a P-card program or found ways to increase usage of an existing program. This is more than twice the percentage ...