Accounts Payable Supplier Manager
Often under looked, Accounts Payable is challenged with the task of ensuring suppliers are paid – but it is not simple. Accounts Payable, often owns the supplier master, but, as importantly, is: juggling federal regulations (e.g., tax compliance); managing payment schedules: tracking down bad banking information; dealing with ongoing communications with suppliers; and, navigating through multiple systems of record to identify the proper supplier to pay (and when).
HICX’s Accounts Payable Supplier Manager enables your organization to overcome and streamline the common hurdles, such as:
When it comes to onboarding suppliers, efficiency matters. Yet, as companies evolve, they can be reluctant to automate what soon become ineffective processes. Such organizations waste resources on manual efforts to account for ever-changing workflows, information needs, and verifications.
What, ideally, should trigger the need for action? It should be an event that activates the necessary resources as opposed to reliance on resources dedicated to constant oversight of all information exchanges. The goal is “management by exception.” However, few companies have implemented intelligent supplier management systems tied to their specific policies and unique environment.
You should be concerned about:
- The time to onboard a supplier – or update supplier information
- Managing a supplier’s tax and/or banking information
- Internal costs and duplication of effort required to create a complete supplier profile
- Your organization’s ability to segment and manage information collection dependent upon supplier-type and use
- Supplier off-boarding controls
ERP systems are never created alike. The information collected on any given supplier, and the use of the information collected, is probably not the same across ERP systems. Many companies experience difficulty managing and syndicating supplier information within these information silos. These problems are evident even in organizations with a single ERP instance as the content necessary for managing suppliers goes far beyond what ERP systems were traditionally designed to handle. The organization ends up with disparate and disconnected systems to handle all non-ERP supplier data.
Supplier activation requires involvement by many, but a single missing element (e.g. an NDA, tax or VAT information; banking information or payment terms) can slow or even stop the process. Because supply chains cannot be jeopardized over onboarding delays, or bottlenecks, companies often end up using manual efforts to oversee the onboarding process, or find ways to circumvent the process altogether.
Segregation of duties
One of the ongoing concerns of most Accounts Payable departments is getting in front of a supplier payment. Studies have shown that the average company experiences at least two to four fraudulent AP incidents per year – and the average length of the scheme is two years.
You should be concerned about:
- Ensuring two, or more, competent and qualified individuals are involved in the approval of a supplier.
- Ensuring that all invoices match a supplier that has been preapproved.
Too often, AP is involved only after invoices are received – and, too often, payments are sent out only after sourcing finds out they are not approved, or after AP discovers that the supplier shouldn’t have been paid.
Invoices follow many different formats and arrive from different avenues. Even after implementing an “Electronic Invoicing” platform, suppliers struggle with having to supply information into multiple, disparate systems.
How much effort is spent dealing with:
- Re-entering invoice information into multiple systems?
- Dealing with invoices that arrive in email, fax, mail, or other?
- Matching invoices with the proper record within supplier master?
- Correcting information supplied on an invoice, such as payment terms?
Invoice systems, whether within the ERP platform or other, are not often equipped with properly matching, correcting, and communicating invoice data. These systems have value, yet few can relate an “internal view” of a supplier with the transactional view of a supplier. As such, Accounts Payable continues to be burdened with the least strategic aspect of their mandate.
Payment discounts / rebates
More often than not, suppliers are paid without pre-negotiated payment terms. These terms, however, have significant impact on the value of the organization. For example:
- What is the value of payments that meet 2/10 Net 30? (hint: roughly 36% return rate on cash)
- What is the value of negotiated rebates, directly to the bottom line?
- What can extending payment terms do for your organization’s Working Capital?
Too often organizations are not in a position to easily communicate, and get agreement on payment terms – and, by the time they could, the window would already close. Too often, organizations cannot track relevant rebates, and achievement against them; therefore, they go uncollected. And, too often, it is too difficult to negotiate preferential payment terms, even if the intention is to pay them early, in order to optimize working capital.
Accounts Payable, and the Treasurer, are able to leverage the company’s resources strategically, yet many current systems handcuff their ability to leverage their own buying power.
How much time is spent on the phone with, or in answering emails from, suppliers that want to know where their payment is? And… How much time is spent trying to track that information down? Whether due to an incorrect invoice, bad banking information, or just being “in process”, valuable resources are wasted on helpdesk activities.
What if a supplier could log onto the same system they: 1) manage ALL their supplier master data with (e.g., contacts, banking, tax info, etc.); 2) submit their invoices to; and, 3) check on the status of their invoice/payment?
HICX’s Accounts Payable Supplier Manager offers Accounts Payable the ability to manage both the onboarding process of new suppliers, as well as the ongoing management of the suppliers. The solution would enable you to:
- Segregate duties PRIOR to approval
- Collect supplier master data, as it specifically relates to your needs, such as:
- Supplier accounts receivable contacts, internal contacts, etc.
- Negotiated payment terms
- Applicable rebate volumes
- Banking information and validation (e.g., IBAN, SWIFT, ABA, etc.)
- Tax information and validation (e.g., SS#, W8/W9, VAT, etc.)
- Syndicate master data to all relevant ERP systems and/or invoice systems.
- Collect invoices from the supplier, with applicable meta data (applicable PO, etc.), etc.).
- Matching invoices to purchase orders, buyer, etc.
- Direct suppliers to a helpdesk so that they can track their own status.
- Gain visibility into volume discounts and/or rebates.
- Communicate with suppliers in mass, and gain agreement, to adjust payment terms.
- Communicate with suppliers in mass, and gain agreement, to accept and/or negotiate early payment discounts.