5 FAQs in AP, Finance and Shared Services

Even as more and more organisations embrace or mature their shared services model, there are questions that still get asked on a regular basis. Here are 5 FAQs about AP, finance and shared services.

What is the difference between centralised finance and shared services?

Both centralised finance and shared services take typical ‘back office’ finance functions, including Accounts Payable and Accounts Receivable, and aim to make them more efficient by co-locating teams and taking on work that might be done in disparate offices.

Both centralised finance and shared services automate and standardise processes to improve efficiency.

The difference between centralised finance and shared services is that shared services operates like a business within a business.

Shared services see the wider business as their customer.

What are the most important KPIs in AP?

There are a number of KPIs that could make this list, but here are some of the most important metrics to assess the efficiency of your AP process.

  • Days to authorise payment
  • Percentage of payments made on time
  • Days Payable Outstanding (DPO)
  • Early payment discounts captured
  • Cost per invoice
  • Percentage of Straight-through Processing (STP)
  • Percentage of invoices electronically captured

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Will AP automation tools make people redundant?

Yes and no. There’s no doubt that technology has an impact on the type and number of people we employ.

Technology usually means we can do more with less.

Particularly when it comes to manual and repetitive tasks like data entry, these jobs may become redundant as companies adopt more technology.

However, for the majority of finance professionals, technology means jobs are changing. You no longer have to spend hours building a spreadsheet because your software has done it for you.

You don’t have to search through binders of papers, because a quick search brings up the document you were looking for.

This means finance professionals can do more of the strategic and value-adding work they are trained to do.

Where are the quick wins in P2P automation?

Two of the most important aspects of automation in procure-to-pay are capturing invoices and purchase orders (POs) electronically.

The biggest wins in P2P automation come when POs are always raised and captured in the system and invoices arrive in your system electronically.

These two factors can make or break a P2P department.

Without these, your teams will need to spend a lot of time on the phone, opening various inboxes and keying in data manually.

Once you tackle these areas in P2P, your efficiency should improve exponentially.

What are the common pitfalls in AP automation?

  1. Poor communication. Not giving people enough information about why change is happening and how it will affect them.
  2. Master Data problems. The best technology in the world will probably not meet your expectations if you have poor data in your system. Sorting out your data will help your efficiency project enormously.
  3. Not owning the project. Your AP automation efforts may sit with the head of AP, Shared Services, IT, or sometimes even Procurement. The owner may vary, but what’s important is that there is someone who is accountable for ensuring the right technology is applied, that users are trained appropriately and that you continue to measure its impact on your department.

Did we miss any important FAQs for AP, Finance and shared services?

If you think so, get in touch with a question!

Recommended Reading :

White Paper – 5 reasons to digitalise your Procure-to-Pay Process

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Post by Sarah Fane,
Manager of Content Shared Services Link

Sarah Fane manages the research and production of content for sharedserviceslink. She is the author of sharedserviceslink’s research reports and white papers, and is a regular presenter at finance and shared services conferences and webinars. Sarah has worked for a variety of B2B media companies since 2008, developing engaging content on changing industry dynamics and technology.

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