This week I spent time in Nashville. (Short aside) This was my 5:30 am wake up call: “bing – bing – bing…”. I thought the alarm was going off so I was trying to unplug it. It continued, “Attention guests, we are under a tornado warning and need to evacuate the building. Please proceed to the front desk for instructions.” I got up and was moving somewhat slowly. Suddenly all the lights went out and the building began to shake (I was on the 8th floor). My “somewhat slow” movements increased to a full on hustle. When I reached the front desk there was staff pointing me in the direction of a safe location. There I found a few of the other guests. All in all, there were about 200 guests of the hotel collected in a room with chairs. It was funny to see what a mass of people look like just after being awakened from a sound asleep. A few looked as though they could use a hangover treatment, and some had their hair smashed to one side. Others looked like they got up and took some time to put themselves together. The thing that struck me was the how well the staff was prepared for this event. They clearly had a plan, and had tested and trained for this plan. Props to the person who made the call to evacuate… there was a clear decision to err on the side of caution.
What does this have to do with Accounts Payable? Nothing really – I just wanted to tell a story and relate that, if you are ever traveling in Murfreesboro TN – stay at the Embassy Suites.
Ok, that was the start to the day. We only spent about 20 minutes in the safe area. It didn’t stop by day. I had a chance to spend some time with a current automated client. She gave me a few pointers on how I can improve. Then I asked if her goals in going from paper to automated had been realized. That’s when she gave me a very interesting piece of information. She said “Absolutely!” She explained that being web-based helped by not having approvers tied to their desks at their office (because their business was seasonal). But this one was the one that struck me. The company didn’t have many payables. Only 2400 per year. However, she was forced to use a system that did not have an integration to her accounting system. The company wanted AP to digitize (or as I like to say – electrify) invoices for research after approval. This simple decision made the data entry go from 2,400 payable per year to 4,800 per year. Well we fixed that, but the point to be made here is; when choosing a service provider and making what seems like a minor decision, AP can enter the payable into the accounting system, then into the document storage system, doubling their work and cost, and lessening the possibility to grow or scale.
That is why Pitfall 2 – Service Provider (Vendor) Selection is so important.
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