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Improve Your Payables Process and Watch the
As a company in the real estate industry, your payables processes are likely to be complex, intense and unique. You may be paying small contractors for maintenance and lawn care, and larger vendors across your footprint for professional services and property improvements; and engaging with your financial institutions to meet deadlines and requirements for an evolving range of payments as you buy, sell, lease and rent out properties.
Getting a handle on all of these diverse payment streams has the potential to improve your net income and offers other benefits as well.
When you pay an invoice, you’re not just sending money out the door. You are taking on costs every step of the way. Every resource used in the payables process may increase Days Payables Outstanding (DPO) and require the attention of staff who might be better deployed elsewhere.
Consider thinking of payables in a new way — as a tool to manage your bottom line. To do that, you need to view the process as a whole.
Best practices suggest:
- Taking into account all the human resources involved
- Evaluating WHY the processes were established (Was it to mitigate fraud or maintain control? Were processes limited by the technology available at the time?)
- Determining what can be done to automate the process to increase DPO and reallocate human capital
- Using new processes as a foundation for negotiation with suppliers and to improve payment terms
End-to-end invoice processing comprises centralized receipt of supplier invoices, related image and data capture and automated matching and web-enabled approval workflow.
Steps to Reduce Costs and Improve Net Income
In order to reap the considerable benefits of invoice automation, consider reaching out to your bank to implement the following steps:
- Image and data capture can reduce manual scanning and data entry costs.
- Automated matching and web-based approval workflow can reduce manual routing and approval activities, accelerate processing cycle times and increase opportunities to capture available early pay discounts.
- Connecting to a global e-invoicing network with more than 250,000 suppliers allows you to receive electronic invoices submitted by suppliers through a web portal or direct file integration.
- Variance threshold configuration can enhance straight-through processing (STP).
Address Compliance and Industry Standards
Invoice automation can also help you streamline your compliance reporting and bring your processing up to the highest industry standard.
- Centralized invoice receipt allows you to record liabilities promptly and helps you minimize the number of lost and/or late invoices.
- The visibility created through the process can improve forecasting of pending payment obligations.
- Online approval workflow improves internal controls through systemic routing for appropriate sign-off and approval.
- Duplicate invoice validation can reduce the risk of overpayment.
- The improved reporting capability helps you meet SSAE16 & SOC I & II auditing standards.
To learn more, please contact your PNC Real Estate Relationship Manager.
More than 60% of finance professionals are optimistic about the impact of faster payments on their organizations.
Source: 2016 AFP Electronic Payments Survey, Report of Survey Results
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