Find Your Way to Successful Multi-Site Accounts Payable

Controlling business operations across multiple locations is a real challenge for many companies. For example, an auto repair company, ABC Corp., has three locations. The Accounts Payable department at ABC Corp. headquarters struggles each month to manage the invoice management system amongst the three different locations.

There are two strategies to handling the payables process in a scenario like the one above:

Centralized Accounts Payable

This is when a centralized accounts payable system aggregates all of the Accounts Payable functions together in one location.

De-centralized Accounts Payable

Just what is sounds like, this system puts the responsibility for handling receiving and managing invoices in the hands of on-site staff. Once the invoices are approved, they are referred to headquarters for payment.

Of course, there are pros and cons to both strategies. The key challenge that the ABC Corp. Accounts Payable department faces with both approaches is the difficulty of managing invoice approval systems.

Here’s Why

Businesses using a centralized AP process have the advantage of all invoices arriving and being processed in one location, but once the invoice is sent to different locations for approval, visibility and control is lost. No one wants to continually harass approvers over unapproved invoices, so the AP team is put in a tough spot since they have payment deadlines to meet. So, they cross their fingers and hope for the best.

Meanwhile organizations using a de-centralized Accounts Payable process must rely on staff at various locations to manage incoming invoices, track approvals, and refer them to the central office on time for payment. This often causes confusion as invoices are sent to different offices or addressed to different people. Meanwhile, the central office has no visibility into the process taking place at the different locations.

What a nightmare!

The Middle Way Accounts Payable Strategy

The solution to this problem, as it often is with two extremes, is somewhere in the middle. It employs the strengths of both methods to create a process that gives a company’s Accounts Payable department real control over the process, to make sure it gets completed as quickly and efficiently as possible.

In the scenario above, invoices from all vendors are sent to ABC Corp. headquarters for processing and assignment amongst the three locations. Remote staff are better equipped to handle approvals and issues, while the central Accounts Payable team has the ability to monitor the activity. Using the right solution to communicate between everyone involved with that invoice, even vendors, will drastically reduce the amount of time AP spends tracking down invoice approvals.

The key here is flexibility and collaboration. The Accounts Payable process can be adapted to the unique context of each invoice, while giving Accounts Payable full control and visibility. Division of responsibility can allow many people to code and route invoices for approval, with final processing and payment handled by the central Accounts Payable department. Whether you currently use a centralized or de-centralized strategy in your organization, you may find that not having to chose one over the other is in fact the best choice.

That’s not all. Deploying a collaborative AP Automation solution within multi-site organizations leads to:

• Better forecasting with real-time visibility into cash flow
• Faster invoice processing with A.I. & machine learning
• Fewer inaccurate payments made to vendors

Companies interested in exploring a Middle Way Accounts Payable strategy should consider technology solutions that allows for easy, flexible communication between sites, while maintaining central control over the process.