The Financial Controller and CFO's Toolkit, 3rd Edition

Chapter 5Reduce Accounts Payable Volumes by 60 Percent

OVERVIEW

The accounts payable team is the center of an accounting function, for without its smooth operation, the finance team can never move forward. This chapter explores the better practices adopted by leading-edge accounts payable teams.

Many large organizations have made massive inroads into accounts payable and, quite frankly, will find this chapter rather basic. To those I say simply, move to the next chapter. However, many finance teams are wedded to Charles Dickens processes and procedures. This chapter is an extract from my white paper “50 + Ways to Improve Your Accounts Payable Function.”¹

REMOVAL OF ALL CHARLES DICKENS PROCESSES

I believe the accounts payable team is the center of an accounting function, for without its smooth operation:

• Monthly accounts cannot be prepared promptly.
• The company does not, at any point in time, know its total liabilities.
• Budget holders spend too much of their valuable time processing orders and approving invoices for payment.
• There is a low level of accuracy in the monthly accounts due to missed liabilities and posting errors.
• The processing procedures are more akin to the Charles Dickens era than to the twenty-first century (after all, Charles Dickens had a checkbook and received paper-based invoices).
• Suppliers are forever on the phone querying payments.
• Expense claims are a nightmare for claimants and the accounts payable team.

The key twenty-first-century AP better ...