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What drives a high performing accounts payable department?

ArticleAnna Bowsher, Reseacher22.10.2012 Comments (0)


Last week, at sharedserviceslink.com’s US Summit for Leaders in Finance Shared Services conference last week, over 70 end user delegates debated the performance drivers of their shared services departments, and how to cash in on them to upgrade their service offering.

Luckily, our expert panel were on hand to guide them: Eric Jones, Head of Corporate Payables from Lowe’s, Todd Holcomb, Director of Supplier Services from Alliance Data, and Bruce Kelly, Managing Director of Advisory Services at PRGX.

Here are their top tips for realising and maximising the benefits of your shared services value drivers:

How do you define a top performing accounts payable department?

Our panellists came up with a variety of factors, but the key features that stood out included automation, process efficiency and effectiveness, and the engagement of all stakeholders in the business.

Todd Holcomb explained that by automating your processes, you can significantly increase visibility and control. It also helps to future-proof your organisation. “The savings that can be made with automation technologies are significant, and by making the most of whichever solution you go with, you can ensure that you’ll be in a strong position to adapt to changes”.

Eric Jones was keen to emphasise the difference between process efficiency and effectiveness, however. “Process effectiveness means you’re doing the right things, and efficiency means you’re doing them the right way”.

Something that all our panellists mentioned was the importance of engaging staff and stakeholders. “By changing the outlook of the organisation, by placing ourselves as a business partner of the organisation rather than simply as a back office function, our staff understand how their role fits into the bigger picture. We can therefore give them more responsibility and ownership”.

Who drives process excellence?

Once again, our panellists unanimously agreed that there is rarely one person driving process excellence. In the leading organisations, there is an internal culture of ambition and drive.

While many of our audience members cited the CFO as being a key driver, Eric stressed that “every member of staff must be involved, though having senior management buy-in is no bad thing”.

Bruce added, “Ideally, you will have cross-functional support, from both middle managers and the more senior decision makers”.

By ensuring that every department and level of management (even the less obvious ones) understands the business case for a project and how they and their staff can affect the outcome, you will ensure that excellence is being driven from all angles. However, each business is structured differently, and as Todd mentioned, in a decentralised operation, having one clear message from HQ can encourage standardisation.

When do you know you’re there?

In the fast paced market of shared services, perfection is a moving target. “In this business, you can always be better”, said Bruce Kelly.

“Internally, never assume that you’re good enough”, added Eric. “There are no best practices, just leading practices”.

“In benchmarking surveys, the top 10% are usually considered the highest performers, but in reality, you know you’re a top performer when you’ve got true visibility and understanding of your own processes”, Bruce continued. He divided this into three areas: the business culture, the supplier base and the customer. “Once you understand how your business works, how you need it to work, and what you need to do to get there, you will become a top performer”.

While benchmarking against other organisations may give you an overview of the market therefore, it always going to be the internal drive that will ensure you are continuously improving.

What are the key KPIs?

Eric said that in his experience, monitoring payment on time rates is a good indicator of the overall process. Bruce also suggested looking at the number of touch points in any process as a guide of process efficiency. 

As Alliance Data is decentralised, however, Todd said that measuring the number of invoices processed per FTE allowed senior management to understand which business units were performing and which ones weren’t, and to what level.

How do you define ‘high performance’ in terms of accounts payable processes? Who do you consider to be top performers and why? Our Accounts Payable Tech and e-Invoicing Summit 2012 in December will be addressing how to leverage your accounts payable offering through automation technologies. If any of these issues resonate with you, or you would like to share your own leading practice tips, get in touch on +44 (0) 203 751 2333 or anna@sharedserviceslink.com.

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