CPD Accredited Webinar: Expert Strategies for Surviving Your Accounts Payable Audit - Thursday 25th April - 2:00 PM (GMT) l 9:00 AM (ET)

Claiming Savings and Identifying Savings – The Route to Increasing Profits

The Accounts Payable team has the ability to do much more when it comes to spend analysis, all of which can help to improve profitability. In fact, it can also expand and win new business where possible, which will also help to drive up profits. So, how can AP teams claim savings, identity savings and win new business?

The Accounts Payable team has the ability to do much more when it comes to spend analysis, all of which can help to improve profitability. In fact, it can also expand and win new business where possible, which will also help to drive up profits. So, how can AP teams claim savings, identity savings and win new business?

A Unique View of Spending

AP team members work closely with vendors on a daily basis and this puts them in a unique position that allows them to make improvements across three areas. This includes consolidation of vendors, consolidated invoices and reverse factoring.

By consolidating vendors that provide similar items, it makes it possible to reduce vendor numbers and improve buying power using procurement. By working closely with vendors it helps to strengthen vital buying relationships. It is also possible to work with vendors that have a high number of low-value transactions on a regular basis. You can request that they provide consolidated invoicing which covers a specified period regardless of how many orders are made. This helps to speed up cycle time and reduce invoice processing costs.

Supply chain financing is also a possibility and involves AP working with vendors that have a smaller turnover than their own company. The vendors are then encouraged to join the program to take advantage of improved payment terms that are usually offered by your bank. As a result, you’ll receive a share of the income which will grow as more vendors join.

Attracting New Business

While generating income with the latest software and systems proves highly effective, it’s possible for AP to seek out new business opportunities. If the options discussed above are implemented, then invoice numbers will decrease and this will leave staff with more time to carry out functions that offer higher value or they can carry out more business transactions that relate to the business they have won. However, there are two ways that this can be achieved.

To begin with, this can be done within group as many businesses have the scope to handle the input and processing of invoices and payments in one team. As a result, it’s then possible to negotiate a fee internally to cover the costs associated with this. Furthermore, AP could also take responsibility for managing some procurement responsibilities which can include master vendor management.

The other option is to do this externally. Taking a step away from centralisation, you can implement best-in-class practices to create a shared service centre that incorporates other functions such as IT, HR, Procurement and finance. The teams take a proactive approach to obtaining new business from other businesses through tenders and they can achieve this in a cost-effective way while also adding value.

These are clear and concise ways of turning AP into a department that has the scope to generate profit by utilising the right processes, approaches and tools, giving them the insight to make informed decisions

Share This

Facebook
Twitter
LinkedIn

For further information or to request a demo:

Would you like to know more about what FISCAL can do for you? Contact us at:
[email protected] or call +44 (0) 845 680 1905

OR

Popular

Archive

Archives

Category

Categories

Want to know more about FISCAL Technologies?

We’d love to show you our solutions in action!