Supplier Enablement

Supplier Enablement - the dreaded business case

There are many variables that can included or excluded in the calculation of what cost savings are achievable from automation of a Purchase to Pay process where those savings are computed on the cost of processing an invoice. There is agreement that savings are achievable but is focus on unit (per invoice) cost savings the full picture?

• An invoice clerk processes 9,000 invoices per year. Not my figure but a number I have quoted to me several times by those that know their AP departments. There is a cost for each clerk how will a move to automation change the workload of clerks?
• Not all supplier invoices will be correct and that involves others in the query and resolution process. This time is unrecorded but has a cost to a business. How many invoices per year are put in 'query'?
• Are discounted payment terms being taken full advantage of?
• When things get messy with a supplier payment how much management time is consumed in intervention to mediate?
• How much time is spent on handling supplier enquiries; 'when can I expect to be paid?'
• When you receive invoices for which there is no Purchase Order or other reference, how long does that take to resolve?
• If your suppliers were paid on time according to agreed settlement terms for clean invoices, what could you ask for in return from your supplier?

posted by FrankB @ Wednesday, May 17, 2006