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Global Accounts Payable – Global Payments Solutions Reduce Complexity


Category: Blog  |


Organizations with international footprints face complex challenges when it comes to global accounts payable.  With the rise of globalization, most businesses have experienced rapid international growth.  This has created new stress for AP departments, which now must consider different currencies, time zone differences, and various tax and other regulations.

In their report “Accounts Payable without Borders,” Aberdeen Group focuses on these challenges and what best-in-class companies are doing to optimize and streamline their AP processes in the face of growing globalization.

Best-in-class organizations are 130% more likely to have a global accounts payable solution in place than the industry average.

 

Supporting scalability is critical to improving global accounts payable efficiency.   For example:

  • 100% of best-in-class companies use electronic approval workflows, compared to 63% of all others
  • 100% of best-in-class companies remit direct electronic payments to vendors, compared to 78% of all others
  • 81% of best-in-class companies use software configured to capture and interpret payment processing, compared to 62% of all others
  • 75% of best-in-class companies use bots to perform repetitive rules-based processes, compared to 62% of all others

Best-in-class companies deploy capabilities that enhance visibility as well as scalability.  Greater visibility into the payment process enhances cash-flow management, as well as reduces risk.  Aberdeen finds:

  • 100% of best-in-class companies have complete transaction audit trail histories available on demand, compared to 81% of all others
  • 100% of best-in-class companies have centralized invoice management processes, compared to 74% of all others
  • 88% of best-in-class companies have automated reminders for outstanding items awaiting approval, compared to 73% of all others
  • 88% of best-in-class companies have automated notification of errors, exceptions, or other items requiring management review, compared to 62% of all others

Global accounts payable leaders have invoice processing costs of $3.63 per invoice, compared to $8.69 for followers.  Their invoices processing time is 3.8 days compared to 11.1 days.  They’ve reduced exception rates to 21% compared to 37% for the rest.  And perhaps most significantly, they have an early discount capture rate of 91%, compared to 83% for followers.  That’s money straight to the bottom line.

Aberdeen recommends that companies who want to improve their global AP process follow the best-in-class firms to implement a global payments solution that integrates all the separate payment processes into a simple, standardized process.

Read the Aberdeen report.

 

AP departments must consider different currencies, time zone differences, and various tax and other regulations for global accounts payable.

AP departments must consider different currencies, time zone differences, and various tax and other regulations for global accounts payable.