Transaction risk intelligence
Automated supplier statement reconciliation
Supplier risk intelligence
Managed AP recovery audit
Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
Your accounts payable team have their own ways of working that are unique to your organisation. No two finance processes ever look completely the same, and therefore the way you manage your transactions are not the same either. Each of you may take a different approach to managing your transactions, so we have laid out the options you have in this blog.
The equilibrium of accounts payable.
Your everyday goal with transactions is to pay the right supplier, the right amount at the right time. That’s a careful balance of ensuring invoices and POs are correct, while also being fast enough to pay within terms.
Automate to increase speed and reduce costs.
There are many SaaS solutions designed to help you increase the efficiency of your finance process. There’s software to move invoices from your supplier inbox to your ERP, to automate payment to suppliers. While these robotic helpers can really increase your speed, they also come with a couple of quirks that mean you still need to look over your transactions to ensure they’re performing properly.
And that’s where our own robot comes in. Our risk management software is designed to find the risks that the others don’t, and to find some they might even create. But we never forget the human element. When our software finds the risks, we show them to you so you can get that final look before it goes off for payment. It removes the need for spot-checking, for tirelessly comparing invoice after invoice and instead gives the vital information you need to stop duplicate payments, overpayments, underpayments, fraud, and more.
Managing transactions via prioritisation
Of course, it’s up to your team what matters the most to you to maximise your efficiency, however we think there are a few ways this can be done. You may prefer one methodology, or a mix of them all:
Prioritising by date the payment is due.
While a range of factors will affect how you prioritise transactions, quite often, a strong approach is to arrange them by how soon the transaction needs to be reviewed for payment. Dependant on your process, you could use your Days Payable Outstanding to do this to round up long-standing payments, or simply use the date the payment is due. The rest is self-explanatory, with those most pressing being reviewed first, and those that are a fixed payment, like bills, are automated and therefore are never reviewed. Despite saying this, we do recommend that you check these latter transactions every now and again to ensure they are correct.
Prioritising high-transaction volume suppliers.
Suppliers with high transaction volumes, and those with high numbers of line items on their invoices, are often those that your organisation are the most reliant on to run at optimum productivity. It stands to reason, then, that you may wish to give these suppliers higher priority when it comes to payment. With prompt and consistent payments, you may be able to benefit from an improved supplier relationship and negotiate better terms such as early payment discounts.
Prioritising transactions from suppliers with the highest spend amount.
Again, these suppliers will likely be the ones your business is most reliant on. In fact, many of them may be the same as those with high transaction volumes.
However, it is important to note that working capital optimisation is an important factor when thinking about prioritising payments, as there is a careful balance between ingoing and outgoing cash where, depending on your organisation, a large amount of money may tip your outgoings too far.
Best practices when checking your transactions.
To prioritise checking your transactions for errors and issues, we like to use the now, next, later or never approach. This means categorising your transaction processing and checking by what is the most pressing to you, what should be checked before payment run, after payment run and those that do not need to be checked and can be automated.
Categorise your transactions for optimum efficiency with FISCAL.
Our software makes this process simple. We allow you to categorise the risks that we show you to better control how your team views them. They can be split in multiple ways: by supplier, invoice amount, error type and more. So, you can categorise suppliers who give recurring monthly bills into one group to review each month, rather than each day. Or you could group high value risks so they can be reviewed easily by a senior member of the team on a daily basis.
Change your point of view.
A different perspective is often needed to see where inefficiencies lie in transaction management. There are a few ways to looks at things differently.
First, speak to the boots on the ground. Often, the people who are the most aware of the issues are the ones on who complete the day-to-day tasks. Speaking to them, even taking an hour or so to sit with them or in fact doing their job with them can reveal difficulties quickly. It’s important here to be completely transparent, ask questions, and be mindful of the larger picture. If they don’t follow process, for example, why is that?
Transactions can be large and unwieldy. When looking at transactions, there can be too much information. We each learn and think in different ways, and sometimes it’s worth switching your viewpoint literally. Is there another way you can organise your data to make it simpler or more in-depth? Whether it’s viewing your transactions as a grid, list or seeing your collated data in the form of reports, with graphs and charts. Not only does a different point of view allow for you to read the data differently, but it allows you the chance to group transactions in different ways, allowing you to make connections you may not have thought about before.
Assign the right actions to the right people.
Maximum cost efficiency lies in value versus cost. That means ensuring your processes work in the most effective way for maximum value. In larger teams where AP workload is shared, to create that value, you can match your team’s strengths intelligently with your regular jobs.
Knowing what motivates your team and acting on it is the perfect place to start. Is there someone whose skills lie in the details, and can easily root out the cause of a discrepancy? A person whose greatest skill lies in manipulating technology and data to give you accurate and useful reports?
So, attribute a proportion of their work to their strengths, accompany this with further development, and you’ll see a positive change in your team efficiency.
How do we know? According to Gallup (the people behind the Clifton Strengths test), employees who receive strengths-based development have 8% – 18% greater performance.
Conclusion
To conclude, you can manage your transactions better and increase your cost efficiencies in these four following ways:
- Automating processes to increase speed and reduce costs.
- Managing transactions via prioritisation.
- Changing your perspective to find inefficiencies.
- Assigning the right tasks to the right people.
