Who would have thought that just-in-time principles used in manufacturing to eliminate waste and create a hyper efficient manufacturing process could be applied to accounts payable?
While the review and approval of an invoice may not follow the same steps as a manufacturing process, the potential for transformation is similar. Today, it’s possible to create a hyper-efficient AP operation by having invoices process themselves, so AP staff can support more valuable activities.
That’s the power of a business network.
For the AP function, collaboration over a business network accelerates invoice processing, while providing a portal for suppliers to view information in real-time about where there invoices stands in the process, and when they will get paid.
Even more, having invoices process themselves eliminates what Ardent Partners calls the “scourge of AP”: invoice exceptions. In its research report, ePayables 2015: Higher Ground, 56 percent of AP professionals stated that enhancements in this area will help push AP to the next level of performance.
That next level is to run live in AP.
To run live means that you work at the speed of the digital economy. Business rules in the network handle invoice validation. Visibility into invoice and payment status helps suppliers better manage their cash flow, and the ability to collaborate over payments—request acceleration in exchange for early payment discounts—can be a valuable source of financing.
That’s the case with Mediafly, a Chicago-based software company that provides content distribution solutions for sales and marketing professionals. As a supplier on the Ariba Network, Mediafly is improving the way it manages its payment cycle with customers. The key to improving cash flow is dynamic discounting, which has provided access to the capital it needs to fund growth.
On the accounts payable side, when you run live, productivity soars. Your AP staff manages only the occasional invoice exception, allowing them to focus their efforts on more strategic tasks, such as:
- Driving suppliers to an electronic process, and monitoring their performance
- Supporting procurement efforts to enforce compliance to preferred suppliers and negotiated prices
- Expanding early payment discounts to increase returns on cash
To learn more about how you can transform payables for business advantage, I invite you to attend SAP Ariba Live, June 13-15 in Madrid, Spain. Here, you can take advantage of keynote presentations, networking opportunities and breakout sessions such as Innovations in Payables and Finance and Supply Chain Finance: Win-Win Working Capital Benefits for Buyers and Suppliers.
Espero que puedas hacerlo!