F&A Outsourcing Optimization Opportunities Cheat Sheet

EXECUTIVE CHEAT SHEET | CONTRACT HEALTH CHECK & BENCHMARKING

F&A OPTIMIZATION OPPORTUNITIES

Accounts Payable

Accounts Receivable

Business metrics

Business metrics

Improvement levers

Improvement levers

/ Automated monitoring of process leakages and elimination / Automated flagging of payments before due dates / Batch monitoring and rationalization of payment terms

/ Predictive collections and bad debt analysis tools / Automated collection reminders and customer alerts / End-to-end integrated and dynamic O2C workflow system / Customer risk monitoring and segmentation analytics

DPO

DSO

/ Standardization and automated trigger alerts for AP / AP resource training and dynamic payment monitoring

On-time payment

/ Centralized mailroom / Use workflow tools to control order queries / Escalation based follow-ups

Average time to bill

/ Automated three-way match, standardized controls, and exception monitoring / Integrated end-to-end workflow system for buyers and approvers with read-only access to strategic vendors / Mail room virtualization / Implement matching feature in ERP / Establish end-to-end process metrics for decision making / Controls at all levels and automated process standardization / Increase percentage of straight pass-through for invoices / Increase touchless processing via automation and e-invoicing / Standardized AP shared services construct versus BU based

Error-free invoicing

/ Re-define algorithms to increase the first pass yield / Perform RCA and train users accordingly / Customer risk monitoring and segmentation

Cash application process

PO penetration

/ Digital dashboard / Electronic bill presentment

Cash application time

/ Image-based workflow – OCR implementation / Automated invoice and cash application tools / AR helpdesk and collection targets / TAT for Disputes

Agent productivity

/ Web-based E2E communication / Automatic invoicing and dispatch / Advanced credit analytics / Predefined remittance advice format / Cash flow forecasting

General Accounting

% of billing rework

Business metrics

Improvement levers

/ Integrated dispute and communication tools / Dynamic discounting – early payment incentives

/ Standard corporate reporting calendar / Reduction of general ledger accounts / Use of identical chart of accounts

Days to close month end

/ Customer portal with dashboard capabilities / Electronic sales order management / Shared service center model / Cloud-based technology for invoices / Auto cash algorithms / Fraud prevention and payment trend tracking / Collection strategy engine / Dunning letter-based follow-up for aged debts / Digitize the documents to convert to electronic invoices / Automated OCR integration / Initiate e-invoicing platform to move invoices to touchless

/ Automated JE postings / Auto reconciliation from SL to GL / Standard financial reporting templates / Reduction in total JE / Automation through Excel-based reconciliations

Customer invoices per FTE per month

Reconciliation error

/ Auto set-up of fixed assets / Auto feed from subsystems to GL

/ Web-based global calendar with clear accountability / Automated reconciliation with exception reporting / Use of standard JE list for month-end closing / Standard ERP module workflow (for inter co.) / Fixed asset management application / Treshold-based JE approval mechanism / Active schedule tracking and dashboarding / Automated financial reporting integrated with ERP / Chart of accounts rationalization / Tracking and tractability of open item reconciliation / Robust JE work flow tool / On-demand reporting platform / Centralized ERP inter-company module

Reconciliation cycle time

Manual invoice reduction

Journal entry automation

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