Free: 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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WAVESTONE.US | T: 610-854-2700 | 2019 © WAVESTONE

EXECUTIVE CHEAT SHEET | CONTRACT HEALTH CHECK & BENCHMARKING

ASSESSMENT AREAS

40%-60% improvement potential optimization and transformation initiatives

Strategy IT-business alignment

30%-40%

15%-20%

Execution The organization’s run state

Financials Accuracy of budgeting

OPTIMIZED OPERATIONS

MODERN DIGITAL BUSINESS

These should be assessed with two questions in mind:

? 1. How do we compare to industry standards and rates? 2. What work drivers can be optimized for speed and cost?

OPTIMIZATION

DIGITALIZATION

Combining both optimization and transformation agendas is the only way to achieve 50% improvement potential

F&A GLOBAL SOURCING

PREFERRED MODEL

Shared services

Nearshore

25%

30%

Offshore

50%

Third Party

75%

20%

Onshore

F&A TRANSFORMATION-LED TCO IMPACT

Actual cost profile in Q4 2018 of next-gen F&A service desk

Traditional improvements Linear 3%-5% cost reductions driven by operational maturity and marginal productivity gains Step improvements Re-baselining due to L0 self-help and self-heal, and disruptive cost ramp-downs due to progressive shift-left and FTE de-linkage

Traditional continuous improvements

35%-40% step reduction in TCO

Step improvement trajectory

Year 1

Year 2

Year 3

Year 4

Year 5

TIME

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