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Effective Strategies to Enhance AP’s Relationship with Internal Customers

Introduction

Developing a solid relationship with key internal customers, such as Procurement, Finance, and IT, is important for the long-term success of any Accounts Payable organization.  During a recent Peeriosity PeercastTM, we looked at the experiences of one of our member companies as they worked to enhance these important provider/customer relationships and how they measured the success of those efforts.

Company Experience

A Peeriosity member company who is a global manufacturer of food products recently shared their efforts in improving how their Accounts Payable organization interacts with their major internal customers.   One of the first steps they took was to identify strategies to enhance Accounts Payable’s relationship, which included transparency of information, optimizing working capital, building processes or systems to prevent early/late payments or duplicate payments, creating a frustration free experience, automation of specific activities, and centralizing work for standardization.   While asking for feedback for how satisfied internal customers are is important, the first priority was to proactively enhance the relationship by taking a leadership position on issues that were the most important to their customer base.

One example cited was a project where Accounts Payable worked closely with Procurement, Treasury, and Finance to negotiate new payment terms with their supplier base as part of an overall effort to increase DPO and working capital.  Some of the experiences and lessons learned from this joint effort included the following: 

  • Finance/Treasury found new opportunities with SCF & Virtual Cards
  • Procurement found opportunities for payments made early without discount or areas of missed/lost value
  • Procurement found opportunities with incorrect contract terms
  • Accounts Payable found areas of incorrect terms in PO Lifecycle
  • All functional teams found areas to accelerate and areas of no value
  • A little bit of AP data transparency goes a long way
  • Positive outcomes from the project have created interest in additional joint projects, including evaluating Payment Terms, RPA, PO Lifecycle, and many other inefficiencies or opportunities

Additional details regarding their timeline for this effort, as well as the metrics and benefits related to it are included on the Peeriosity member website, along with the detailed discussion found as part of the Peercast recording.

iPollingTM Results Review

A recent Peeriosity poll created using the iPollingTM technology provides some insight regarding how Accounts Payable leadership keeps up to date concerning the satisfaction levels of their customers.  The first poll question looked at the frequency that the AP organization conducts customer satisfaction surveys.  The practice of measuring customer satisfaction annually is followed by 33% of the companies, with 44% indicating that they do not conduct customer satisfaction surveys for AP.  The remaining 23% of the companies utilize a variety of survey frequencies.

The second poll question then addressed who is included in the AP customer satisfaction survey population, with 80% including only internal customers, while 20% include both internal and external.

Some of the comments Peeriosity members made related to this poll include the following:

Real Estate & Construction Member: We do an actual formal survey annually; however as part of our Shared Services model, we reach out to our customers periodically to assist in improving our processes.

Consumer Products & Services Member: We have conducted internal surveys in North America for several years now. There has been some actionable feedback captured to help us improve the process. Having formal P2P structure and support is critical as more often than not issues with POs, 3-way match, price/qty. discrepancies, etc. translate into invoices being paid late. Being able to communicate the improvement opportunities and partnering with upstream process owners to deliver changes will keep survey respondents engaged for future iterations.

Real Estate & Construction Member: We don’t have a formal survey, but we request feedback in our quarterly discussions with internal customers.

Manufacturing Member: The follow up with unsatisfied customers is done on quarterly basis after the survey.

Healthcare, Pharmaceuticals, Biotech Member: We would like to do this sometime in the future.

Manufacturing Member: We found out the shorter the survey, the more input we received.

Consumer Products & Services Member: We actually have different surveys going on. On our AP help desk (for external vendors), they are provided with a link where a survey is available. Unfortunately the up-take is very small. There is another annual sensing with external vendors conducted by Sourcing, where P2P provides some input. Internally, we do some sensing with internal users annually as well.

Healthcare, Pharmaceuticals, Biotech Member: I would be interested to know if this is along the lines of a Key Experience Indicators exercise – i.e. finding out about how your customers find the process vs. the hard measurement of payment of invoices on time.

Closing Summary

Being able to effectively communicate and interact with major internal customers is critical to the overall success of any Accounts Payable organization.  While the approach may vary among companies, the need to focus on this important aspect of their operation should be a significant priority.

What is the status at your company regarding the relationships of Accounts Payable with its key internal customers?  Is this an area that should be reviewed in the coming months at your company?

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

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“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 to 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 iPollingTM.

Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here.



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