AP Organization Chart

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AP Organization Chart
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Department Highlights

• Our department was rated Excellent by IOMA based
  on their 2001 benchmarking study measuring
• Cost
• Productivity
• Low error rate
• Our department was ranked in the top 100 among
  the 900 participants.

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Productivity Stats

• During the average month, AP processes
• 40,000 AP vouchers
• 20,000 checks
• Average time to process from opening the envelope
  to boxing the batch 3 days

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IT WASNT ALWAYS LIKE THAT!
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Once upon a time . . .

• It took as much as two weeks to process a payable
• We had a backlog of problem invoices that could
  take multiple months to resolve.
• We lost discounts because we were missing account
  numbers, signatures, etc.

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Once upon a time . . .

• The AP clerk was a troubleshooter who spent the
  majority of his/her time
• Coercing internal customers into complying with
  company policy
• Talking to collectors
• Begging vendors for W-9s
• Chasing after packslips and approvals

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How did we get from there to here?

• THE FIRST STEP
• We identified the problems
• in our current state.

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How did we get from there to here?

• THE SECOND STEP
• We defined our desired state.

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To achieve our desired state,

• 1. We made sure our internal customer knew what
  to do.
• In cooperation with Purchasing, we designed an
  in-house training program to educate them.

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We actually developed three training programs in
one

• A 2-hour, one-stop, everything you ever needed
  to know program included in our companys roster
  of training classes
• A ½ -hour, the most important things to know
  orientation program
• A one-page, heres what you never want to do
  memo

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To achieve our desired state,

• 1. We made sure our internal customer knew what
  to do.
• 2. We made them do it!
• You not only need to educate,
• but motivate. And if you have to . . .
• intimidate!

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Some people need to know . . .

• Why the policy is good for everyone. Explain
  that compliant vouchers lead to more efficient
  processing which leads to
• Discounts
• Better controls
• A more professional workplace
• Time to develop management tools

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Some people need to know . . .

• Why not following the policy is bad for everyone.
  Explain that non-compliant vouchers take more
  time to process and erode controls, resulting
  in
• Higher headcount, higher payroll costs
• Late charges and lost discounts
• Poor credit ratings
• Exposure to fraud and duplicate payments

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Some people need to know . . .

• Why not following the policy will be bad for
  THEM!
• Over budget? Show them how much they paid in
  late fees, how much they lost in discounts.
• Conference them in on the next call from one of
  their unhappy vendors.
• Tell them the company may be sued, and WILL be
  audited.
• Talk to their manager. This is a performance
  issue.

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The Results . . .
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No W-9? They dont get a dime

• Our associates are familiar with the W-9, know
  why it is needed, and work with us to get their
  new vendors properly set up in the AP system
  prior to doing business.

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You got it fast, but youre out the cash!

• Buying it now and applying for reimbursement
  later may seem like a real time-saver, but our
  associates arent fooled. They know that
  procuring their own purchases is a risky business
  that wastes THEIR time and THEIR money in the
  long run.

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If your moneys not seen, check in between.

• Associates know that prompt payment depends on
  those in between themselves and AP. They
  follow up with managers to ensure their requests
  for reimbursement are properly approved, coded,
  and delivered to AP in a timely manner.

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What the heck is a manual check?

• They dont exist in our organization. Associates
  have realistic expectations of the time needed to
  process a payable, and they know what they can do
  to facilitate payment.

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What do invoices and Bigfoot have in common?

• Both are mythical creatures that few can claim to
  have seen.
• Invoices are the property of the AP department,
  period. Vendors mail them directly to AP where
  the majority are matched and paid with no need
  for intervention from operations. Cost center
  managers are provided with robust reporting that
  eliminates their need to ever see an invoice.

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A Final word

• If at first you dont succeed, train, train
  again.
• And even when you do succeed, train, train again!

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Any Questions?