Skip to Content
Author's profile photo Former Member

Payables Management = Toothache?

Payables managementtooth hammer.jpg within many organizations is viewed with the same enthusiasm as a toothache. It may be dull or throbbing a bit, but nothing worth investing too much time. Only when the pain gets severe do we schedule that visit to the dentist. And by then, it’s become an emergency.

Lost discounts, early supplier payments, less than optimal purchase pricing? Not a big deal in the grand scheme of things, right? Who has time to track that down anyway? Most of us in SAP Land using Accounts Payable (AP) are stuck in a world of dumping data out of FBL1N (raise your hands- you know who you are). Or we are in FBL3N or FAGLL03 analyzing a single account for spend, downloading it into our spreadsheet army knife for analysis. If we are lucky we have a few static reports in BW where we can pull data. But it is pretty unlikely we have robust tools for easy analysis and troubleshooting. AP- we’ve been around forever, and so have our solutions. Original technical solutions were built and people moved on. And now our solutions are dated, haven’t had significant investments, and we work with what we have. We are treated as a cost to manage.

Payables management is a critical component of working capital management. For many organizations, there is a complex myriad of systems to management this process: third party supplier networks, invoice routing systems, core transactional systems. We have data everywhere, making it more difficult to know where to start in our analysis.tooth brush.jpg

After we fix our initial toothache, what do we do? We need processes and technologies to maintain and perform continuous improvement; it is here where many analytics promises lie. The ability to analyze all of the information in our financial supply chain across our organization provides us with new opportunities. We can now watch for the lost discounts to analyze our underlying process failures. We can understand where we are paying suppliers too early so we can decide what adjustments to make to our processes. Predictive analytics is our regular dental care to ensure we are attaining the optimal cost mix for payables and preventing the toothaches of the future.

Assigned Tags

      Be the first to leave a comment
      You must be Logged on to comment or reply to a post.