This statement would of course only apply to those companies that are big enough to have a division between AP and senior management. I would hate to know of a company where the CFO and the Director of AP are the same person and they didn’t know there were problems.
Once Upon A Time
I took part in a survey about five years ago. The results were a huge surprise to me. Up to that point, I really felt like senior and middle management were in-step together with AP problems. The results told another story.
We simply asked about 20 company’s AP Manager and CFO the same two questions. Question one, are there any problems in AP? Questions two is there any pain in the accounts payable process? You would think that there were pretty simple questions with simple answers, but here is what happened.
The CFOs answer, in unison, that there was no pain in the accounts payable process, and their best guess was that the accounts payable process cost about $1- $2 per invoice.
Directors of AP
This group also included Controllers too… They said, in unison, to the same questions that they would have no guess on how much the process cost, but they are sure it was high and they wouldn’t want to know because it was so expensive. To the other questions the middle manager group answers that there was so much pain in the process… lost invoices, overtime, fire drills (etc.) that they really didn’t want to talk about it.
As you can imagine, I have had a lot of time to think about this, what I consider, shocking result. What I found is that both groups weren’t terrible communicators, they just worked and were responsible for different financial aspects of the business. When it comes down to it, for AP Automation purposes, the middle group can’t assume anything when it comes to justification.
Because the middle group owns the pain and expense, and the senior group owns the authorization, they both has to have very good reasons to get rid of the paper in AP. I have found that the middle group concentrates on process improvement and the senior group concentrates on financial returns.
With AP Automation
When deciding on Accounts Payable Automation, in your plan to automate make sure you have both process improvement and financial returns accounted for.
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