Best operations-improving strategies

By Mark Brousseau

During a pre-conference networking lunch at Fusion 2011 at the Gaylord Palms Resort and Convention Center in Florida, attendees were asked to share the best operations-improving strategy that their accounts payable (AP) department has implemented in the past 12 months. Here are the operations strategies that the luncheon attendees said were the most effective during the past year:

... Provided AP processors with two computer monitors, reducing errors and increasing efficiency
... Took the time to better understand AP processes (became "black belts" in evaluating processes) to weed out the processes that don't add value
... Migrated more payments from paper check and wire transfer to automated clearing house (ACH) transactions
... Separated straight-through and exceptions processors
... Deployed a new enterprise resource planning (ERP) solution
... Deployed a purchasing card program
... Became more open-minded to new ideas
... Started reimbursing via a debit card since some people won't take direct deposit and paper checks are too costly and inefficient
... Began measuring and improving input quality, in turn, increasing AP productivity without changing any processes
... Began e-mailing and faxing remittances to save time and postage associated with paper remittances
... Developed a proprietary travel and expense (T&E) reporting system
... Brought AP functions previously done in India back in-house, resulting in savings of $26,000 a month, largely from fewer mistakes
... Implemented an imaging and workflow solution, reducing processing time and enabling all staff to know where an invoice stands in the approval process
... Standardized on one system and one process whenever possible
... Implemented virtual card payments
... Automated accounts receivable (AR) refunds
... Consolidated various overnight shipping and cellular phone accounts into "master" accounts, allowing the company to negotiate discounts of 18 to 50 percent off list prices
... Automated payroll processing with ACH
... Eliminated duplicate vendors, in turn, eliminating many duplicate payments

What is the best operations-improving strategy your AP department has implemented in the past 12 months? Post it below.

Interest in p-cards still going strong

By Mark Brousseau

Want more proof of the continued strength of purchasing cards (p-cards) as a key component of accounts payable (AP) programs? Look no further than this week’s NAPCP Commercial Card and Payment Conference at the Paris hotel in Las Vegas.

Some 657 people – representing 265 end-user organizations and 85 provider organizations – are in attendance at this year’s NAPCP event, up from 616 attendees last year (although still down from the 850 people that attended NAPCP’s event in 2008). Overall, 54 percent of the attendees are from end-user organizations and 46 percent of the attendees are from provider organizations, such as banks.

Among the end-users in attendance, 51 percent describe their experience level as “advanced,” while another 39 percent say their experience level is “intermediate.” Only 10 percent of attendees at this year’s NAPCP event say they are “beginning” with p-cards – further proof of the growing maturity of p-cards. In terms of the sectors represented, 61 percent are from corporations, while 23 percent are from government or primary education and 16 percent are from higher education.

By far, the hottest topic among attendees is how to grow their existing p-card programs to further reduce costs, increase productivity, and earn rebates. Many attendees also are looking for ways to better integrate p-cards with their purchase-to-pay (P2P) initiatives (it seems many more P2P professionals are in attendance).

Health Reform’s Impact on AP Costs

Posted by Mark Brousseau

The new federal health reform law will drive accounts payable (AP) costs higher over the next two years according to industry stakeholders who responded to a survey at this week’s IAPP-TAWPI Healthcare Payments Automation Summit (HPAS) in Boston. The survey was conducted during the conference by IAPP-TAWPI, APQC and PRGX. Survey respondents included healthcare payers and providers; third-party services providers (such as medical billing firms); banks; and IT vendors.

More than half (51.9 percent) of the HPAS attendees who responded to the survey predicted that health reform will result in higher AP costs over the next two years, while 48.1 percent of survey respondents said that AP costs will remain unchanged. None of the conference attendees that responded to the survey believe that short-term AP costs will decrease as a result of health reform.

HPAS attendees who responded to the survey were more divided on the long-term impact of health reform on AP costs. More than one-third (36.2 percent) of survey respondents believe that health reform will drive AP costs higher long-term (defined in the survey as over two years from now), while an equal percentage of respondents believe AP costs will remain unchanged. On the bright side, 27.7 percent of respondents predicted that health reform will result in lower AP costs long-term.

Among the other findings of the HPAS survey:

… Data integration, processing performance, and integration of physician data were the top healthcare AP challenges identified by respondents, followed by cost pressures, manual data entry (which drives costs up), and the ability to track and report evidence-based improvements in cost.

… Most survey respondents (57.7 percent) believe that health reform will have no impact on AP processing performance over the next two years, while a plurality of respondents (39.6 percent) predicted that health reform will result in lower AP processing performance long-term.

… Nearly two-thirds (64 percent) of survey respondents believe that health reform will have no impact on AP late payments and error rates. Long-term, survey respondents were more divided, with a plurality (38.3 percent) predicting that health reform will have no impact on AP late payments and error rates, 31.9 percent predicting that health reform will result in more AP late payments and errors, and 29.8 percent predicting that health reform will help decrease AP late payments and errors.

… HPAS attendees are not optimistic about health reform’s impact on IT systems costs. Nearly two-thirds (62.3 percent) of respondents believe that health reform will drive IT systems costs higher over the next two years, while 37.7 percent of respondents predicted that systems costs would remain unchanged. None of the respondents believe that health reform will result in lower systems costs over the next two years. Long-term, half of the survey respondents believe that health reform will result in higher overall IT systems costs, while 18.8 percent believe IT systems costs will decrease. About one- third (31.3 percent) of respondents predicted that systems costs will remain unchanged.

“Big changes are coming in healthcare, and AP organizations must ask themselves if they are ready,” APQC Analyst Neville Sokol told HPAS attendees. “At times like these, organizations are turning to data and best practices to help them solve problems, improve processes, or design something better. These tools can help make sense of a complex world, and provide a roadmap for moving forward.”

Wanted: Cash Forecasting Technology

By Mark Brousseau

Senior financial executives say cash flow forecasting is the top area where better technology and/or more outsourcing is needed, according to Treasury & Risk's 2009 Strategic Treasury Survey. Thirty-six percent of respondents cited solutions as lacking in cash flow forecasting. Other areas seen as wanting: accounts payable (cited by 16 percent of respondents), accounts receivable (14 percent), budgeting and planning (13 percent), and cash management (13 percent).

What do you think? Post your comment below.