Outsource Magazine

As more companies look to outsource their accounts payable duties, practices have the opportunity to enhance their business by offering a hosted service to meet their clients’ needs. So what does it take to play host?

Companies in all sectors are seeking to reduce costs, and searching for ways to improve efficiency within their business. For many this has involved outsourcing certain aspects of their business functions, and AP is one of the first to go external.

Finance practices are already responsible for easing the pressure of administrative duties for companies, so the opportunity to enhance their service offering is almost too good an opportunity to miss. Not only will it allow you to strengthen your involvement within your clients’ business, but it’s also a chance to attract new business too.  

One of the most time-consuming tasks for your clients is handling supplier invoices. As this is such a pain point for them, the chance to pass the responsibility over to someone else would be a godsend. By hosting an AP service you will be alleviating one of the biggest pressures on your client, not to mention the benefits to you in terms of a rapid return on investment and a steady-flowing revenue stream.

Although the prospect of removing this responsibility will appeal to your clients, it is likely that they will be hesitant when you propose to do so. That’s why it’s important to understand the reasons for their hesitation and to have the ability to address these hesitations accordingly. Having the right solutions in place will enable you to offer a hosted service; getting your clients to embrace the idea is the tricky part.

How to build your AP engine

The first step involves setting up a scanning bureau for your clients’ invoices, which can then be uploaded into the AP solution. A cloud-based solution is ideal for maximum flexibility and ease-of-access at any point during the process. This also removes the need to install client software on the PCs of EIM service users, for easier and quicker deployment, helping you to deliver a quick-start service.

It’s also beneficial to have a solution that supports automated matching of the invoice to its corresponding PO, contract or other supporting documents, for improved visibility and retrieval by all members of staff involved in the approval process. Once fully processed, the invoices are then sent to the client’s finance system where they are authorised by the relevant staff.

Reassurance – why do they need it and how do you provide it?

Although many companies welcome the idea of business efficiency, some can be overly cautious when discussing the prospect of outsourcing, especially when it involves the life-blood of their existence. The best way to explain the benefits of outsourcing is to point out that in doing so, they are able to focus on more productive, less time-consuming duties, which too should help to improve efficiency and improve overall business output.

So what are the common concerns?

• Losing control… Despite handing over the role of handling the invoice approval process, companies are still responsible for approving everything; therefore nothing is completed without their authorisation. If customers are concerned about this, an outsourcing agreement will allow them to stipulate the conditions with their provider. Using web-based architecture will also reassure them that they still have control, as it allows them to easily access the workflow at any time, from any location; providing greater visibility over the entire process.
• Total security Clients may think that by allowing their financial information to be handled externally, it is at greater risk of being misplaced or failing to be kept confidential. This is a complete myth as outsourcing companies invest heavily in security, and most likely have stricter security measures in place than the client themselves.
• Is it all or nothing? Clients can decide how much of their AP process they choose to outsource, from a small amount to the entire process depending on their preferences.
• They may not understand my business… Although your client’s business is unique, their AP process shouldn’t be: it should be managed transparently and according to best practice, both for efficiency and regulatory compliance.

To summarise, hosting an outsourced AP service is a way to enhance your ability to accommodate your clients’ needs, by offering them a secure, efficient, reliable service that will help them to allocate their time to more critical tasks within their business. This can be done without compromising the handling of their invoices, allowing them to retain control and offering real value as the perfect outsourcing host.

About the Author

Lucy Beck joined Palette with over 10 years' experience in the computer software industry, having previously worked for specialists in accounts payable (A/P) automation such as Digital Vision and I-Dynamics. In her role as sales director, Beck is responsible for directing sales from a strategic perspective, and managing all sales activities to ensure continued growth and success for the company.