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Continuous Improvement and Evolution of Accounts Payable

A recent PeercastTM featured a $5B manufacturing company with global operations and over 10,000 employees.  While they have a global Shared Services organization in place, there remain challenges to standardizing processes due, in part, to systems differences.  While SAP is used globally, there are three SAP instances, with one for the US, a second for Europe, and a third used for AMEA (Africa, Middle East, and Asia).

The company has made steady progress to improve its Purchase-to-Pay processes in North America since the move to Shared Services in 2000.  Ten years later, the effort increased dramatically in scale, with the implementation of a global organization for Shared Services.   Even though much progress had been made, the “hard truth” was that, even in North America where the largest investments had been made and large gains realized, the Accounts Payable process still had some highly manual activities, requiring temporary staff support and with “paper everywhere”.

In 2010, after evaluating multiple vendors, the company selected ReadSoft as a front-end imaging solution, with a US go-live date in early 2011 and Europe implementation six months later.

Listed below is a summary of some of the lessons learned from the project:

·         When implementing globally, ensure as much process standardization prior to implementation as possible.  Exceptions can be difficult to manage.

·         Build metrics into your stabilization phase quickly to allow you to see deviations.

·         Make sure the project team includes everyone in the Purchase-to-Pay process, even if the project doesn’t appear to directly impact all parties.

·         Having a robust plan for testing is an absolute must.

·         Make sure to clean up any invoice backlog before the go-live date.

·         Be sure to include end-users in the training.

·         Use workflow tools when possible, and be aware that OCR isn’t a perfect process, so be prepared to handle exceptions.

·         Most importantly, don’t implement new technologies around a broken process.  Fix the process!

Results from supporting iPolling1 questions confirm that pursuing ongoing improvement in Purchase-to-Pay process is a priority for most companies, with 86% with projects within the past year and many pursuing related projects on an annual basis.  Here are the details:

 when was the last time the accounting payable process was improved for productivity ipolling results

Results of the follow-up question were interesting, with 48% citing “competing priorities” as the greatest obstacle to re-engineering projects for Accounts Payable, with 21% primarily concerned that the current technology options are not ideal for the projects they would like to pursue. Only 7% cited a lack of funding as being the biggest obstacle.

 ipolling results on biggest obstacle in pursuing re-engineering projects for accounts payable

Comments from iPolling participants provide additional insight:

·         Each year we put significant effort into continuous improvement. We utilize metrics both to set goals and measure progress in this area.

·         Improvement projects in A/P are more difficult for us because we do not own the entire Procure-to-Pay cycle so we struggle with making changes in our Procurement processes because there are different stakeholders and priorities.

·         This is an ongoing effort for us as well, with several projects focused on specific processes within AP. We have not had any major re-engineering efforts across all of AP since upgrading our ERP system. This was a significant effort that forced us to re-engineer nearly every process we manage.

·         The greatest obstacle for us is a combination of competing priorities due to IT and Project resource availability, combined with legacy business complexities.

·         We do not own the ERP or the entire process, so re-engineering the process is very challenging.


How recently has your company pursued an improvement effort for the Purchase-to-Pay process?  What is next on your list of improvement initiatives for this process?

Who are your peers and how are you collaborating with them?



“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

 “iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.


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