AP Organization Chart Senior Manager, Finance Manager AP Manager Payroll Manager Accounting AP Supervisor AP Supervisor Reporting Specialist Matching Specialist Check Produciton Media Control Invoice Processing Debit Balance Collection Retail Matching Vendor Correspondence Department Highlights Our department was rated Excellent by IOMA based on their 2001 benchmarking study measuring: 1. Cost 2. Productivity 3. Low error rate Our department was ranked in the top 100 among the 900+ participants. Productivity Stats During the average month, AP processes: 40,000 AP vouchers 20,000 checks Average time to process from opening the envelope to boxing the batch: 3 days IT WASN’T ALWAYS LIKE THAT! Once upon a time . . . It took as much as two weeks to process a payable We had a backlog of problem invoices that could take multiple months to resolve. We lost discounts because we were missing account numbers, signatures, etc. Once upon a time . . . The AP clerk was a troubleshooter who spent the majority of his/her time: Coercing internal customers into complying with company policy Talking to collectors Begging vendors for W-9’s Chasing after packslips and approvals How did we get from there to here? THE FIRST STEP: We identified the problems in our current state. How did we get from there to here? THE SECOND STEP: We defined our desired state. To achieve our desired state, 1. We made sure our internal customer knew what to do. In cooperation with Purchasing, we designed an in-house training program to educate them. We actually developed three training programs in one A 2-hour, one-stop, “everything you ever needed to know” program included in our company’s roster of training classes A ½ -hour, “the most important things to know” orientation program A one-page, “here’s what you never want to do” memo To achieve our desired state, 1. We made sure our internal customer knew what to do. 2. We made them do it! You not only need to educate, but motivate. And if you have to . . . intimidate! Some people need to know . . . Why the policy is good for everyone. Explain that compliant vouchers lead to more efficient processing which leads to: Discounts Better controls A more professional workplace Time to develop management tools Some people need to know . . . Why not following the policy is bad for everyone. Explain that non-compliant vouchers take more time to process and erode controls, resulting in: Higher headcount, higher payroll costs Late charges and lost discounts Poor credit ratings Exposure to fraud and duplicate payments Some people need to know . . . Why not following the policy will be bad for THEM! Over budget? Show them how much they paid in late fees, how much they lost in discounts. Conference them in on the next call from one of their unhappy vendors. Tell them the company may be sued, and WILL be audited. Talk to their manager. This is a performance issue. The Results . . . No W-9? They don’t get a dime Our associates are familiar with the W-9, know why it is needed, and work with us to get their new vendors properly set up in the AP system prior to doing business. You got it fast, but you’re out the cash! Buying it now and applying for reimbursement later may seem like a real time-saver, but our associates aren’t fooled. They know that procuring their own purchases is a risky business that wastes THEIR time and THEIR money in the long run. If your money’s not seen, check in between. Associates know that prompt payment depends on those “in between” themselves and AP. They follow up with managers to ensure their requests for reimbursement are properly approved, coded, and delivered to AP in a timely manner. What the heck is a manual check? They don’t exist in our organization. Associates have realistic expectations of the time needed to process a payable, and they know what they can do to facilitate payment. What do invoices and Bigfoot have in common? Both are mythical creatures that few can claim to have seen. Invoices are the property of the AP department, period. Vendors mail them directly to AP where the majority are matched and paid with no need for intervention from operations. Cost center managers are provided with robust reporting that eliminates their need to ever see an invoice. A Final word: If at first you don’t succeed, train, train again. And even when you do succeed, train, train again! Any Questions?
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