Accounts Payable (A/P) Manager Keeps her Job

“In the battle between quantity and quality, quantity always wins”. This was a mantra that the A/P manager at a $18M retailer of industrial parts repeatedly pointed out. She was referring to the increasing workload that was forcing her team to data enter invoices without detailed verification. She was ready to quit as the company couldn’t afford additional resources.

Customer Pain Points

There was no verification of vendors invoices to company’s purchase orders. As a result, vendor bills, in numerous cases had higher than authorized prices.
Several occurrences of duplicate payments; some Canadian invoices paid in US dollars
Heavy backlog of invoices and thus, A/P Aging statement differed from actual vendor dues.
Complete breakdown of communications with Vendors resulting in frequent Hold situations.
No collection of 1099 information and so non-compliant with regulations.
Insufficient memos leading to inability to analyze accounts from a General Ledger standpoint.
Month-End accrual information not accurate.

Our Assessment

The team was overwhelmed with the volumes of transactions and there were no processes to enforce standardization or automation.
The two A/P clerks were very slow and so the A/P manager was pulled downwards to help them rather than manage them. She was therefore not able to bring in latest AP techniques like Electronic Billing and ACH Payment, A/P automation, and Document Imaging.
The team needed some strong leadership in enforcing their Vendors to follow best practices.

Methodology Adopted

1. One of the A/P clerks was offered an early retirement package and with that savings, we brought in two resources from Acctlytics.

2. All bills were scanned and emailed to the remote resources for data verification & entry.

3. The remote resources had access to the company’s cloud-based ERP system with adequate security protocols.

4. The A/P manager trained the two resources remotely over 2 - 3 weeks. A/P being very similar across the world, the two resources caught on very quickly.

Results

Within two weeks, all backlog was cleared; the offshore resources directly contacted all vendors, collected ACH information, 1099 information, enforced all invoices be emailed; cleared all invoices daily with full verification and approvals from the relevant department managers; set up payment arrangements and regular weekly communications. The A/P Manager was thrilled as she now only had to oversee the department, approve ACH and had time to prepare weekly cash outflow plans and other value-added reports for the Management.