Tag Archives: Accounts Payable

5 Ways to Reduce Administration Costs

Despite the turn of the year, 2012 looks set to be another year of austerity and cost reductions. Several well known names from the UK high street have set the tone by reporting less than impressive Q4 results and some are even entering administration.

Here are five suggested ways to reduce operational costs through increased backroom efficiencies.

Administration costs, Smart Admin, e-Invoicing

  1. Adopt e-Invoicing
    By converting to digital invoicing, a business can make immediate savings on staffing, stationary, postage. Factor in slightly less tangible factors such as time and the argument for e-Invoicing is hard to ignore when investing to make greater savings.
  2. Create dynamic pricing and discounting structures
    Offering customers discounts for settling payments early may reduce profits, but a healthy cash flow and balance book is preferable to a sheaf of outstanding invoices. A scale of sliding charges and fees can require intensive intervention to oversee however, so companies introducing such a system should look at implementing our third recommendation simultaneously.
  3. Automate your workflow
    To combat costly human error, introducing automation can speed each step of the payment process by removing the need for manual intervention. The less manual processing that is required, the smaller the margin for error and the less workforce required for accounts payable.
  4. Centralise
    Bring your financial operations into one department. Managing finances across different departments is time consuming, and if time is money, delays in financial processing cost your business. Cut the delays by bringing financial control into a single centralised location and you will recognise associated cost savings.
  5. Digitise your paper
    Your clients may not have an electronic invoicing and payments systems and so they will continue to return physical paperwork. As a result you will need to find a way of capturing this information and getting it into your own accounts system.

Using an electronic invoicing platform like Celtrino’s Smart Admin can help achieve each of these goals and thereby slash costs as a result. Interested? Get in touch to find out more!

Cloud computing, e-commerce and how automating your documents can save you big

“Supply chains that rely on paper-based purchasing, order and inventory reconciliation, and all-important billing and payments, are prone to error, are going to be subject to delay and query, and require a lot of labour to control (…)” Read on our ‘Battle of supply chains’ post.


Document Tourism


Document Tourism is a phrase we use to describe the process whereby a particularly important piece of paperwork “goes round the houses” upon receipt because it lacks certain critical information. The best way to explain the concept is with an example:

A Purchase Order arrives by post at the Supplier’s office. The document is directed to the Accounts Payable department via internal mail ready for processing. However as the clerk begins to enter the Purchase Order onto the in-house accounts system, he notes that the requisite purchase order is missing. Document Tourism

At this point the clerk must contact the account manager for the client and pass the incomplete purchase order back to them for follow-up. The account manager will almost certainly have to send a copy of the faulty document back to their contact at the purchasing company (physically or electronically) so that an amended version can be sent back. Depending on the complexity of the purchasing and payment procedures in place at the buying or selling company, there may well be several more steps involved.


Just like a tourist on a hop-on hop-off bus service, the document travels around several locations, spending varying amounts of time in each location as it makes its way back up the supply chain. Just like a traveller, every stop takes time and therefore costs money (although purchase orders don’t have to buy a coffee at every stop).

Each step in obtaining the missing data results in a delay, and if time is money (which it is), every stop on the trip costs the Supplier.

Touchless to the rescue

The way to resolve similar problems is to implement a data verification gateway, preventing incomplete forms and documents from entering the supplier’s system. Known as “Touchless Systems”, presentation of purchase orders are presented electronically, sent directly from the buyer’s accounts system to the supplier’s electronically.

Taking the example of the missing purchase order number, the document leaves the buyer’s accounts department and is checked for data integrity as it reaches the supplier. If anything is found to be incomplete, the purchase order is immediately rejected and the buyer is notified. Both buyer and supplier benefit from automated processing in this way because less time is wasted by physically passing documents for manual correction.

Touchless processing immediately cuts out the problem of document tourism as there is only ever one stage in passing information back to a buyer in the event of an incomplete request. The savings of time, effort and money will grow exponentially as fewer and fewer documents require manual correction.

For more about touchless systems and how Smart Admin could help prevent document tourism within your organisation, please get in contact.

Dockets in Pockets

What is ‘Dockets in Pockets Syndrome’?  Here at Celtrino we use the phrase to describe a situation which any warehouse manager or other staff member working in goods receipt will recognise only too well. Dockets in Pockets Syndrome boils down to an incomplete paper trail which is a cause of major headaches and financial problems for buyers, suppliers and any other parties involved in the supply chain.Missing delivery notes - Dockets in Pockets

Essentially the whole situation tends to boil down to a couple of well-worm excuses to explain away missing paperwork:

  • “I forgot”
  • “I thought someone else had done it”
  • “It’s not my fault”

Fundamentally the whole “Dockets in Pockets Syndrome” can be distilled into two words; “human” and “error”.

What causes the Syndrome?

We call the problem “Dockets in Pockets” because one of the major causes of supply chain woes is an important piece of paperwork, such as a delivery note, being thrust into a pocket and promptly forgotten about. Several days or weeks later, as the hunt for the paperwork heats up, the offender realises their mistake and wheels out one of the excuses above.

For the worker caught in possession of the missing paperwork, denial becomes the default position in an attempt to ensure self-preservation. As realisation dawns on the errant worker they begin to consider the long term implications of their oversight and ask themselves “what will happen to me if I admit my fault?”

The fact that a major problem can arise from a minor transgression immediately makes them fearful and means they never get around to asking themselves “what will happen to my business if I don’t own up?”

When can diagnosis begin?

In a business reliant on paper-based purchasing, it may take several weeks for identification of a missing document, and even more to trace where it went and why. Factor in the time it takes to resolve such a problem and there could be a significant impact on the purchaser in terms of penalties incurred for failing to meet payment terms.

The problem will go unnoticed however until the Accounts Payable department realises that an invoice cannot be reconciled against a matching delivery receipt. If the receipt is missing, so too is the required paper trail to prove delivery required for payment.

The prognosis

If paperwork goes missing, even infrequently, severe financial consequences can follow. Resolving a gap in the paper trail can be time consuming and extremely expensive. Someone at both supplier and purchaser must investigate the issue to identify where the problem arose and to whom responsibility must be assigned.

Unfortunately a few high profile outbreaks of “Dockets in Pockets” syndrome could be enough to permanently damage a company. The only solution is to implement some form of procedure which removes the chances for human error to impact.

The Future

To combat Dockets in Pockets, processes need to be put in place to ensure:

  1. Was this delivery received?
  2. Was it fully accepted, or partially accepted?
  3. Is the invoice an accurate reflection of what was accepted at the back door?
  4. Whose job was it to receipt it?
  5. Why wasn’t it receipted?

The majority of issues that disrupt the supply chain occur outside the accounts payable department, but it is usually left to accounts payable to resolve them.  Effective supply chain management will ensure that these issues are identified and resolved long before the invoice hits the purchaser’s accounts payable department. In this example the non-return of an electronic goods receipt confirmation would have triggered a process within the supply chain notifying the various stakeholders that the failure has occurred and requires intervention.

The implementation of an electronic system to handle dockets will dramatically reduce the potential for human error. In fact a system like Celtrino’s Smart Admin is probably the only way to permanently prevent future outbreaks of Dockets in Pocket Syndrome.



Automating accounts payable delivers big savings

Have a read of my recent interview with the Manufacturer about how to eliminate the pain of accounts payable processing.

Gartner Report Predicts Continued Growth In Business Process Outsourcing

Technology research giant Gartner has released a series of estimates predicting the worldwide growth rates of Business Process Outsourcing (BPO). According to their report “Forecast Analysis: Business Process Outsourcing, 2010-2015, 2Q11 Update”, Gartner now calculate the BPO market will grow by 6.3% worldwide during 2011, slowing to 5% in 2012.Business Process Outsourcing

Cathy Tornbohm, research vice president at Gartner commented on the report’s findings saying, “Emerging markets are faring far better and, generally, multinational companies continue to look to BPO as a means both to reduce costs and to buoy their business operations during the protracted return to a growth environment. We also see an increase in transaction volume, especially in payroll, recruiting, accounts payable, and customer data analytics and knowledge process outsourcing (KPO) activities.”

Tornbohm was speaking in reaction to a weaker growth prediction for the North American region which is traditionally the world’s largest. Gartner put North American growth at just 3.8% which has had a negative effect on the total worldwide growth estimate.

The Western Europe market is expected to see continued demand from businesses for outsourced services in the CRM and finance and accounting domains. Gartner predict an annual growth rate of 8.9%, well above that of North America, but also lower than could be expected due to various cultural barriers slowing uptake.

The continued growth of the Asia/Pacific market however continues to outstrip expectations with BPO growth estimated at 17.9% in 2011 alone. Gartner have noted that almost every process which can be outsourced will grow in demand throughout the region until at least 2015, with a heavy demand for financial and accounting services and billing processes.

Latin America Business Process Outsourcing is also expected to grow at a healthy 14.7 percent as local subsidiaries of global corporations begin rollouts of integrated systems, causing a knock-on uptake by domestic businesses. Local labour rates remain relatively low in Latin America slowing uptake of BPO, although major investment by service providers looks set to change this situation.

Overall, Gartner suggest that the future growth of BPO looks relatively healthy in the coming years.

True e-Invoicing

Much has been made of Denmark’s transition to mandatory electronic invoicing in 2005 which requires any business who trades with the government to submit their invoices in an electronic format. The success of the system has seen the Danish government making efficiency savings of between €120 and €150 million each year since 2005.

e-Invoicing: Netherlands versus DenmarkSuch headline figures have seen many other national governments looking to implement similar systems with a view to reaping comparable cost savings. The Dutch government have been the latest to make a headline-grabbing statement about e-invoicing, but the technologies they have implemented fall outside what is typically thought of as e-invoicing.

So what is e-Invoicing?

At its most basic level and as the name implies, e-Invoicing is the presentation of an invoice for products or services electronically. e-Procurement platforms such as that operated by the Danish Government, allow suppliers to generate electronic payment demands which are then submitted directly into the Government accounts system.

What isn’t e-Invoicing?

Many people, including the Dutch Government think submission of an electronic version of a document is the same as an e-Invoice. Under this definition, simply emailing a Word document or a PDF counts as an e-invoice because the payment demand is transmitted electronically.

Why does it matter?

Although there are similarities between the Danish and Dutch electronic invoicing systems, the Danes have a clear advantage. By having suppliers submit electronic invoices directly into their accounts system, the Danish Government recognise cost savings immediately through reduced time and effort manually entering invoice details themselves. As soon as the eInvoice is received it is ready for authorisation and payment by the Treasury.

The Dutch Government also receive invoices immediately as documents are attached to emails allowing for savings in postage at the very least. However these invoices must then be manually re-entered into the accounts system, requiring additional staff and duplication of effort for both supplier and customer. As a result, any cost savings recognised by the Dutch Government “e-Invoicing” system will be well below those of Denmark.

The use of a true e-Invoicing system generates substantial cost savings for both buyer and supplier. If in doubt as to whether a suggested system will generate the savings you hope for, try speaking to a specialist provider such as Celtrino.

Accounts Payable and Improving Business Efficiency

Find out how you can make bottom line savings in your accounts payable solution.

De-Duplicating Effort

Letter O in the De-duplicating Effort articlene of the easiest ways to waste time, and therefore money, is to repeat an activity. Some office tasks such as stapling or stamping require repetition, but business process automation should cover those that don’t.

Take invoicing for instance. A common scenario sees your supplier manually creating an invoice, carrying out a mail merge from their accounts system before posting a printed copy to your accounts payable department. Your accounts department then manually enters the details from the printed invoice into your accounts system. They recheck each line on the invoice to ensure that the entered details are correct and flag the transaction up for payment.

During this process, the purchase details have to be manually entered twice. This is duplicated effort which costs both supplier and buyer time, increasing supply chain costs. The supplier has to factor those costs into their prices, as does the buyer.

By implementing an electronic invoicing and purchase order portal management system from Celtrino however, the data re-entry is negated. The invoice is sent directly from the supplier’s accounts system to the buyer’s via the Celtrino platform. The supplier also receives automatic acknowledgement of the invoice’s delivery. Immediately time has been saved for both parties, reducing costs across the board.

An added benefit of the Celtrino offering is that there is less room for human error to cause problems. What happens if the invoice received by the buyer has got wet in the post and the ink has smudged, rendering the line item costs difficult to read? If the accounts clerk enters the wrong details, a payment dispute will ensue, requiring even more time and money to resolve. The electronically submitted invoice however is quickly and accurately interpreted by the Celtrino electronic invoice processing component and entered correctly ready for payment.

The process also works on the purchasing level, allowing a buyer to submit electronic purchase orders directly into their supplier’s accounts receivable system via the Celtrino platform. No more duplicated work for accounts departments and no more data entry issues, means reduced costs all round.

Accounts Payable Problems – Who’s to blame?

A key moment of truth in any trading relationship is the demand for payment for goods/services rendered. It is precisely at this juncture that the specifics of the transaction and the quality of the underlying trading relationship comes sharply into focus.

The organisational structure of many companies means that Accounts Payable department is charged with the pay/no pay decision. Often, however, the facts speak for themselves. The orderly payment of a purchase invoice is delayed by blips elsewhere in the procure-to-pay cycle. The accounts payable department end up unfairly shouldering the responsibility for this and as a consequence are forced to develop a thicker skin than might otherwise be necessary in a well-run company, in turn raising the prospect of inter-departmental problems.

Of course, at times, the supplier can also be at fault either unilaterally or almost seemingly in conspiracy with his customer contacts – but this is a consideration for another day. Some decision makers in buyer organisations can at times be accused of forcing a discipline on its own staff via its supplier base (instructing the supplier in no uncertain language that an order from a buyer representative must not be accepted without a valid PO number – is this good trading relationship practice or a circuitous route of exerting discipline on wayward colleagues?).

Buyer procurement process rigidity is a so called “best practice” employed by some organisations where the process can seemingly become the key KPI. Perhaps given the advances in connectivity of IT systems in conjunction and the partnership model, such an approach may be worth rethinking. Consider the potential improvements in a working relationship if transparency is introduced into the supply chain?

Enter automated accounts payable solutions. Using Celtrino’s end-to-end supply chain automation systems, it is possible to monitor the entire process and immediately identify where the cause of a delayed payment is, and with whom the fault lies. Using the built-in transparent reporting facilities of Celtrino, buyers and sellers can quickly and easily identify and resolve payment problems, reducing friction between parties and preventing accounts payable taking the blame once more.