Accounting in today’s multi-site organizations is a little bit like digging a hole in the sand on a beach. No matter how quickly you bail water out of the hole, it just keeps filling up. Each month in AP departments around the country, it’s a rush to receive, process and pay complex payables accurately and on time. Once these bills are processed, the next month of invoices is arriving. So that doesn’t leave a lot of time for reviewing for errors, much less collecting cost and consumption data that could help you reduce your organization’s monthly resource spend.
How are complex payables different from other invoices?
Complex payables are more complex invoices—like your energy, telecom, water and waste bills—that have varying data formats, frequency, consumption detail, and due dates. Even though your department processes and pays them like any other invoice, they can be a challenge to analyze and audit. So, there is a huge, missed opportunity to uncover billing errors, extract site anomalies and gain insight into opportunities for optimization.
Here are just a few of the complexities of your energy, waste, water and telecommunications invoices that hide savings opportunities:
Nearly every vendor has their own method of formatting and sharing data, making it a challenge for AP departments to capture and audit it in a consistent format to spot mistakes.
Frequency and Variability
Frequent invoices, with a lot of variability in the usage charges or extra fees buried in the detail, are the most complex. They invite higher error rates that are easy to miss.
Terminology or acronyms and charge details in energy, water or telecom bills can make it easy to overlook errors or violations in your terms of service that can be costing your company money.
On average, it takes companies between 17-29 days to process a single invoice, but the average time a utility gives you to pay an invoice is 21 days. That leaves little time to pay the invoice, much less extract and analyze data for savings opportunities.
Keeping up with these complexities can be very overwhelming for an overworked AP department that simply does not have the resources to examine and prioritize each invoice. But because the savings potential is so great, this is one area where it may be smart to ask for some help.
Benefits of Outsourcing Complex Payables
Nearly one in five bills has an issue to investigate, yet many AP teams lack the manpower to conduct more in-depth examination of invoices. However, a third party—like ENGIE Insight’s Expense and Data Management Solution—can become a true extension of your internal team and lift the burden of invoice processing from your shoulders so you can focus on more important, strategic tasks. Here are just a few of the benefits that our process provides to our clients:
- Faster processing: More than 50 percent of invoices are received electronically, allowing us to process invoices faster and avoid late charges.
- Specialist teams: Capture specialists ensure that all line item data has been captured automatically, then bills move to industry teams for closer audit and analysis. These teams work on our clients’ behalf to protect accounts and resolve billing issues directly with the vendor.
- One consolidated invoice: Once we have captured, audited and approved every invoice, the amounts are consolidated, and our clients receive one single payment amount. We then ensure every vendor receives the correct payment, on time.
- Outlier investigation: If our audits reveal consumption anomalies, we work directly with facility teams to investigate and fix the issue, and work to receive credit from the vendors.
- Data reporting: All detailed resource data can be accessed by our clients through the ENGIE Insight Energy & Sustainability Management Platform. This allows clients to create a variety of customizable reports to optimize strategies, identify opportunities for efficiency projects, and report to stakeholders.
Help from Robots (AI)
I’ve written previously that robotic software automation is now critical to finance and AP departments across companies of every size. Automation helps your team simplify the complexity of invoice processing, particularly in the areas that have repeatable, predictable processes. Software can help your staff collect more data, normalize the data, improve data quality, and allow more time for audits that will uncover efficiency gains and savings.
When Sonic Automotive decided to outsource its complex payables to ENGIE Insight, the company almost immediately had better visibility into what they were spending, where and why. Kevin Hensley, divisional procurement manager for Sonic Automotive, was a proponent of outsourcing, and said, “Corporate leaders want this visibility. They like seeing the data and the way it is presented. It also makes future project approvals easier.”
Learn to Love Your Complex Payables
Hopefully some of the suggestions I’ve shared for getting extra help with your complex payables will ease your pain. In fact, I’m convinced that you can even learn to love your bills – especially when you start seeing the savings potential. For an even deeper dive into this topic, I encourage you to view this IMA webinar recording that Kevin and I recently presented.