The “Accounts Payable Customer Service Survey,” conducted by Financial Operations Networks and InvoiceInfo late last year, delved into details about how customer service is managed in AP departments.
Staff Organization for Handling AP Customer Service. When asked how participants handle their customer service, 46% responded that the AP staff takes turns answering inquiries as part of their job, 19% said that a team of dedicated staff members handle inquiries and the remaining 35% responded “Other.” Of those that replied “Other,” 18% are responsible for servicing those vendors they are responsible for processing and 15% assign customer service alphabetically by company name. Other interesting responses include: Varies by vendor between accounting and operations, by who knows vendor best, dividing vendors geographically, a Finance Customer Care Team handles all inquiries unless there is a complex situation that needs to be investigated further, and different people handle different types of questions.
For those participants that have a dedicated staff handling invoice inquiries, 85% of the respondents had between 1-5 employees dedicated to handling inquiries.
Common Inquiries from Vendors and Internal Colleagues. Survey participants were asked to rate their most common inquiries on a 1 – 5 scale. Clearly, and not surprisingly, the most common inquiries are about payment and approval of invoices, such as: When will my invoice be paid?; Has my invoice been paid?; Which invoices are covered on the payment?; and What is the check/payment number?
When payment is not made on a timely basis, AP should expect to receive calls and emails inquiring about payment. But in addition to inquiries about whether an invoice has been approved or paid, questions about why an invoice was short paid or which invoices are covered on a payment were also common.
Customer Service Policies. Of those participants that responded to whether their company has a policy about how long staff has to research and turn around a response to inquiries, 45% responded that they do have a policy and 55% do not.
Of those that do have a policy, the clear majority (59%) of respondents require a response within one day and nearly one-quarter are required to respond within two days. One participant commented that they are required to respond within one-to-two days but that full research/response must be completed within seven days from initial inquiry.
Customer Service Metrics. When asked if metrics are tracked for customer service inquiries, 11% responded yes while 89% said no. Of those that do track metrics, all said that they track (1) How many invoices are inquired upon; (2) What is the average length of inquiry calls or email responses and (3) What is the average, fully weighted cost of an AP staffer handling inquiries.
Of those that do track inquiry costs, each inquiry averages 12 minutes to handle. According to industry surveys, the average hourly cost of an AP staffer is $20.06, which results in a cost of $4.01 to handle each inquiry. Clearly, although most organizations do not track accounts payable customer service metrics, it has a significant impact on driving higher cost per invoice.
A best practice for reducing invoice inquiry calls and emails is to empower your vendors and internal staff to become self-sufficient with a vendor self-service portal. Next month’s newsletter will report survey findings about how companies are using supplier portals. But, in the meantime, if you would like to explore how your company can implement a self-service portal quickly and easily, click here.