Case Study 2B: Managing the Accounts Payable Department
Project Overview
Project: Managing the Accounts Payable Department
Client Profile: The client is a leading bakery company in the Middle East, operating in 7 countries with 10 plants and 25 depots. Their inventory is spread across multiple locations in Saudi Arabia.
Challenge
- Unstructured AP Process: There was a high likelihood of double payments to suppliers or delayed payments.
- Late Invoices: Invoices were frequently received late from the process owners, leading to urgent payment issues and inefficiencies in processing vendor payments.
- Reconciliation Gaps: Vendor reconciliation and balance confirmation were not systematically conducted, causing discrepancies.
Solutions Provided
- System-Oriented Approach: All entries were processed through the system, eliminating manual processes such as email submissions.
- Duplicate Payment Control: System controls were implemented to flag duplicate payment entries. Notifications appeared on user screens to prevent errors.
- Accountability and Monitoring: Responsibilities were assigned to users and monitored through MIS reports, reducing the average processing time from 15 to 7 days. This improved billing cycles and ensured timely payments in 60–70% of cases.
- Vendor Reconciliation: Monthly reconciliation for over 200 vendors was initiated, along with weekly updates on SOA (Statement of Account) status. This streamlined the reconciliation process and ensured timely preparation.
Partnership with BSS – Key Benefits
BSS partnered with the client to implement a comprehensive finance and accounting (F&A) solution. Key actions included:
- Automating IT systems to send payment advice to suppliers automatically upon payment.
- Developing weekly review templates for vendor reconciliation, payable aging, performance tracking, and payment delays.
Outcome
By implementing these solutions, BSS successfully structured the accounts payable process, minimized delays, and enhanced vendor satisfaction through timely payments and reconciliation.