AP Organization & Shared Services
The concept of empowerment, flexibility and a customer-centric focus drills all the way to the accounts payable department and other critical support functions of a business. Consequently, AP departments in some companies are finding themselves reorganized into teams of sometimes five or six individuals, who perform a full array of AP processes serving external vendors, internal employees and governmental agencies.
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While all accounts payable departments “pay the bills,” the manner in which they do so varies from organization to organization. In addition to processing differences, there is a variation in the ancillary tasks that AP is responsible for.
When Candice Klapp first started working for Teck Coal in Sparwood, British Columbia, Canada as an AP clerk, the accounts payable function was scattered among the main office and various mining sites and satellite offices. “AP was not a shared service, and we did not have an automated workflow,” Klapp explains. “When an invoice had to be routed, the three AP clerks had to send it out in a purple…
If your organization is in the midst of a reorganization, downsizing, merger, or acquisition, there's a good chance that AP will experience a shift to a centralized platform and structure.
To get a feel for how outsourcing is trending, the editors of Managing Accounts Payable queried IOFM's AP Member Exchange Advisory Panelists to get a general idea of what is happening with outsourcing in the accounts payable arena.
Different AP departments have differing responsibilities. And even when comparing AP departments that have the same responsibilities, the job titles and the manner in which work is assigned can be different. Here is a chart listing what tasks are performed by which job title based on an IOFM survey. It's an interesting look at who does what.
If you are interested in exploring what various AP professionals are doing with their intranet pages, there's a quick and easy way to find out. Simply conduct a Google search with the key words "Accounts Payable and Intranet." It will uncover a multitude of samples for you to look at.
Automated reporting tools allow your organization to spend more time analyzing and planning instead of manipulating data into manual forms. It creates an environment that empowers end users and stakeholders to understand the current business climate, allowing for a quick reaction to foreseen and unforeseen business changes.
A fully automated, paper-free AP department is the dream of every AP manager. But the task can be daunting and there are so many processes and solutions available that it can get confusing.
By Pam Miller Any time a major change is contemplated in accounts payable–particularly if the change involves those outside of AP–a pilot program is highly recommended. A pilot program allows you to test the change and test employees’ ability to deal with the change. It also gives you the opportunity to work out bugs in new systems or new processes.
There was a time when automated solutions seemed out of reach for small to medium organizations. Automation has always been the goal, but implementing automated solutions was simply not cost-effective.
Index with Links to shared services articles, tools, Q&A, news and networking opportunities on TAPN.
Shared service centers (SSCs) are not a new concept. As far back as the 1970s, organizations centralized AP and other noncore processes. But while these organizations performed AP and other processes in centralized data centers, the methodology of that era was processing-oriented, as opposed to service-oriented.
Recently, the AP department at CHRISTUS Health faced the challenge of managing a consolidation. “We had to transition the individual accounts payable departments at all the regional locations into one AP department at the corporate office,” says Michelle Lynch, Accounts Payable Exception Team Lead. Lynch and the AP team took several steps prior to the actual consolidation to help the transition…
Plenty of decisions must be made when centralizing into a shared services center. However, one of the most important decisions is its location. Where you put your center affects everything from staff wages to the amount of control the corporate office has over AP processing.
Centralizing payables into a shared services center is an effective way to drive out costs through reduced headcount, standardized processes, and automation. Operating in a shared services environment means continually looking for ways to improve processes and preventing erosion of efficiency gains.
Consolidating multiple AP departments into one can significantly reduce costs, improve efficiency, and enhance customer service. But before you can reach that point, you must first staff the new center, which involves the right mix of new hires and permanent and temporary transfers.
The American Red Cross was able to consolidate 40 regional service centers into one in only three months thanks to a combination of invoice reduction strategies (p-cards, recurring payments), increased use of temporary labor, and focused training efforts.
A flowchart is a diagram of the flow of data, process and operations within an organization or business management system.
The Accounts Payable Network’s flow chart templates are designed to help you create a visual document that describes your department’s process activities in your daily operations. Here are example templates provided for common process activities ...
Are you under the gun to cut expenses to the bone? Many organizations are debating whether or not to send some AP functions to an outside provider. If your company is considering this option, make sure you are part of the discussion. Critically evaluate the options that are available, and investigate the pros and cons of each.
Just hearing the term “offshoring” is enough to make many AP managers cringe. The thought of having to split off part of AP and send it to a faraway land is generally not a welcome concept. Some AP managers have successfully avoided offshoring. But in other cases, the move is justified. If you are faced with this prospect, here are the key pitfalls to avoid.
An AP manager at a mining company with 4,000 employees and 12 AP staff members was given a month to centralize the AP operation and also acclimate to a new system. How did the AP manager meet the challenge?
The main reason that decentralized AP operations are consolidated into a single shared services center is to reduce costs and improve customer service. Are these benefits actually being realized? And what are the keys to success? That’s what we recently asked AP pros who have had success in transitioning to shared services.
As businesses focus more attention on their global presence, they are learning that shared services centers are not the end of a process improvement journey, but another stop along the way. The destination is global business services.
At an IOFM Annual Accounts Payable Conference & Expo, a 30-year veteran of AP talked about meeting the challenge of creating a smooth transition to shared services. Penny Weller, Ph.D., CMA, is a senior business advisor with the Hackett Group. Before joining Hackett, Weller was director of shared services at the global pharmaceutical giant Pfizer Inc. (formerly Pharmacia Inc.). She oversaw…
The interest in transforming an AP operation into a shared services setup has never been higher than it is today. Corporate top management knows the benefits in terms of costs and strategic value of moving support functions into a shared services center (SSC), either in a domestic setting or in an offshore location. Many of our readers have found themselves all of a sudden in the throes of…
In 1999, CBIZ, Inc. of Cleveland, Ohio, began designing a shared services environment for its general ledger, accounts payable, and some accounts receivable functions. The effort didn’t occur without some blood, sweat and tears, but Adams believes the end result has been a more efficient organization.
Cost has been the primary driver behind formation of Shared Services Centers (SSCs) to handle a number of back office functions–but the value proposition of shared services can be broader than that, according to a study by Deloitte.
A short summary of some of the pros and cons between centralized vs. decentralized AP operations
The concept of empowerment, flexibility and a customer-centric focus drills all the way to the accounts payable department and other critical support functions of a business. Consequently, AP departments in some companies are finding themselves reorganized into teams of sometimes five or six individuals, who perform a full array of AP processes serving external vendors, internal employees and…
Any successful endeavor begins with a well-crafted plan, and shared services is no exception. Shared services implementation planning includes five key considerations …
Today, accounts payable (AP) departments are experiencing change that is not only impacting the structure of the AP organization but the way it conducts business as well.
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