Accounts payable works every day with many different departments and people, both within and outside the organization, including employees, purchasing, vendors and regulatory agencies. Accounts payable is unique in the sense that its “customers” are not those companies that buy their company’s products or services, but individuals and organizations that have an interest in some aspect of the AP process. AP’s internal customers are the organization’s employees — those who purchase goods or services that AP is responsible for paying as well as employees who are reimbursed for T&E.
Vendors, in order to manage their own cash and working capital needs, often contact, via phone and email, either the person who purchased the goods or AP to find out the status of invoice receipt, approval or payment. Studies show that more and more accounts receivable departments and collectors call well before the invoice is due in an effort to ascertain that the invoice has been received and when payment will be made. For the accounts payable department, answering these calls and inquiries can be a very time-consuming process. In fact, some companies have one or more employees dedicated solely to answering customer-service inquiries. If a vendor calls their buyer directly, there can be even more work involved since the buyer may contact AP to ascertain the status of the invoice, AP has to research the invoice and respond to the buyer, and the buyer has to get back to the vendor with the invoice status.
Answering and researching vendor calls and emails can be time-consuming and often labor-intensive tasks that increase the cost of processing an invoice and take staff away from other responsibilities. In addition, the interruption of taking the staff member away from what they were doing can cause errors in invoice processing. When the caller is upset that an invoice has not been paid and is unpleasant and demanding, productivity and morale may suffer.
Suppliers can’t be faulted for wanting to know this information. And, it is usually AP’s job to provide customer service between their company and their suppliers, as well as playing an important role in managing the relationships with those suppliers. Automating AP customer service with a vendor self-service portal can reduce calls and emails and can save costs and headaches while increasing productivity.
This report will explain how a vendor self-service portal can help suppliers answer invoice inquiries themselves, saving staff time, money and errors.
Depending on the need, vendor self-service portals can include online functionality that provides vendors and internal staff with access to information regarding invoice payment status, submission of onboarding documents including W-9’s and W-8’s, and requests to trigger payments. Online self-service eliminates the need for the vendor to call, email, fax or mail, which reduces manual AP tasks.
There are three ways to facilitate self-service portals: Build it in-house; buy a module as part of your ERP or AP automation software or use a specialized provider.
Vendor and internal customer relations can be greatly enhanced through the use of a vendor self-service portal. Studies show that the majority of the calls and emails that come into AP focus on whether or not an invoice has been paid. To avoid these calls and emails and to slash productivity drain, best-in-class organizations are implementing portals where internal and external customers can access accurate invoice and payment status information within seconds, via the Internet.
The cost to answer vendor and internal invoice inquiries can add up quickly. Whether your organization has a dedicated customer service staff or AP team members who are balancing customer service duties with other tasks, there is often a big cost to this that is not always included in the calculation of cost per invoice. But, in reality, it can be an expensive cost of processing invoices.
Costs include salaries, benefits, taxes, equipment, supplies and training for the customer service team, plus their manager’s time. When you have AP staffers balancing customer service with other tasks, workflow is interrupted and errors can be made. In addition, dealing with difficult vendors can be upsetting and stressful for the AP team member and wreak havoc in the department.
By automating customer service via a self-service portal, as much as 80% of your inquiries can be handled online 24/7 and can drastically reduce calls, emails and interruptions.
If you want to make a case for a vendor self-service portal in your organization, metrics and benchmarking will be vital tools to help make your case. You will need to understand the metrics of where you are currently and compare those metrics to what a self-service portal will bring to the table in order to assess what your organization could be doing.
According to a recent survey conducted by The Accounts Payable Network, 89% of all companies that participated in the survey do not track the length and number of invoice-related inquiries. Without knowing how many calls AP handles and the length of each call, it is impossible to know precisely how much your organization spends on answering inquiries and how much will be saved by implementing a portal.
Invoice inquiries at larger organizations are often handled by a dedicated customer service team whose sole job is to answer invoice inquiries from internal staff and vendors. For those organizations, it will be easier to calculate the cost savings and productivity improvement potential of a self-service portal. At smaller companies that require AP employees to balance customer service duties with other day-to-day tasks, calculating the amount spent on servicing inquires may be more difficult.
On average, inquiries are made on 11% of all invoices received. Here is an example of how much customer service could cost for a typical organization.
Invoices Processed per Month
|% of Inquiries on Invoices Processed||11%|
|Total Inquiries per Month||1,100|
|Average Time to Handle a Query||8 Minutes|
|Hours per Month to Handle Queries||146|
|Cost per Hour||$20|
|Monthly Cost to Handle Queries||$2,920|
As you can see from this example, the cost to service vendors and internal staff can be very expensive. This information is critical to demonstrate to your executive management team why they should invest in a vendor self-service portal. It may also be helpful to have benchmarks of what other comparable organizations are spending. If this information is not readily available, start capturing it so you can make your case to reduce costs and increase productivity in your department.
Converting manual customer service to a vendor self-service portal is a best practice for AP operations not only because it reduces cost and increases productivity, but self-service portals also help AP departments improve service to their internal and external customers that fosters stronger relations and enhances AP’s reputation.
Implementing a supplier self-service portal can help your AP organization:
When making the decision of what sort of automated system you should implement, there are a number of things to consider. As a busy professional, you are balancing a lot of balls, so you want a system that is easy to implement and deploy with the fewest IT resources possible so you can get the program up and running and start reaping the benefits as quickly as possible. You also want a system that makes self-service simple for the users.
10 Questions to Ask When Considering a Vendor Self-Service Portal
Are you and your accounts payable colleagues tired of spending precious time answering invoice inquiry questions from your vendors and internal customers? If you are ready to automate your AP customer service with a vendor self-service application and start reducing cost and improving productivity, following are 10 questions you should ask when considering a portal:
According to a study by The Accounts Payable Network, larger organizations with 10,000+ employees are much more likely to have implemented vendor web portals. Large companies tend to have more technology in place than other organizations. Surprisingly, however, the study indicates that smaller organizations typically benefit the most from portals. While large organizations with vendor portals report a 78% reduction in customer service calls, the median organization with less than 500 employees reports an 85% reduction, according to the same study.
In another survey produced by IOFM, nearly half of the respondents reported that they either currently have a vendor portal or have plans to implement one in the near future. Ten years ago we all used travel agents to purchase airline tickets and book hotels. We actually went to bookstores to buy books. More and more we are all moving toward self-service on the Internet. A self-service portal is not much different — you are just moving customer service to a self-service application on the Internet. It is expected and appreciated.
Implementing a vendor self-service portal helps both your department and your vendors save time and enjoy improved service at reduced cost — so everyone wins!
Learn how an InvoiceInfo self-service portal can benefit your company; call (678) 335-5735 today or request more information online!