Improving Accounts Payable and Utility Bill Management for a Stuffed Toy Retailer

Improving Accounts Payable and Utility Bill Management for a Stuffed Toy Retailer

Our customer, a stuffed toy retailer, has more than five hundred retail locations globally. With a large supply chains bills from hundreds of vendors come in daily. With hundreds of store locations utility bills from hundreds of utility service providers require processing each month. Vendor bills need to be paid on time to assure smooth running of supply chains. Utility bills need to be paid on time to prevent service disruptions.

A. The Challenge of Demand (Settlement) Stage

The in-house team was not able to keep up with the more than three thousand invoices which came in every week. Additional staff had to be hired. Overtime was required. However, the backlog of unpaid vendor invoices continued despite all these increases in staffing costs. Vendors were getting upset.

Vendors are paid every week which requires effort to be put into executing the payment run. The processing of vendor bills must be paused, resulting in an ever-increasing backlog of vendor invoices.

Staff absenteeism was an issue. In a team of four or five AP Analysts one person being absent leads to a quarter of the daily work not getting completed. Accounts payable backlog was ever present.

Lack of organization, prioritization and management of the vendor email inbox led to misplaced and lost vendor emails resulting in missed payments.

B. The Challenge in Utility Bill Management

Utility Bills were received in various formats. Some came via mail as paper. Others via email. Or, fax. Or, in some cases the client retrieved the utility bill from the utility bill site. There was no tracking of bills.

Utility bills were received, opened and scanned. However, this manual process was very erratic. Bill was received and opened but never scanned and uploaded to the account payable processing folder. Or the bill was lost before it was scanned, or never scanned.

Not paying the utility bill on time, or worse not paying the bill at all resulted in frequent utility service shutdowns. Extra fees had to be paid for making late payments. Or for service re-installs. Besides causing many management headaches.

Why our client came to ARDEM

To Manage their Accounts Payable Process

To process more than three thousand vendor invoices every week. With outsourcing of accounts payable they wanted ARDEM to process these invoices correctly and make the vendor payments on time.

Our client wanted the accounts payable process to be managed so that the backlog of pending vendor invoices was eliminated.

The accounts payable email inbox needed to be managed so that there were no invoices lost, or payments missed. And to ensure that payments to vendors were made on time.

In outsourcing accounts payable the tasks related to day-to-day staff supervision, workload planning, managing staff absenteeism were outsourced to us.

To Manage their Utility Bill Payment Process

To process more than five hundred utility bills every month for payment. To set up a utility bill management system so that utility bills are paid 100% on time.

To manage utility bill payment process so that utility bills are received for over five hundred store locations and processed promptly.

To ensure that there were no service disruptions because of lost utility bills or missed utility bill payments.

How did ARDEM help our Client

A. Helping our client with ARDEM Accounts Payable Outsourcing Solutions

1. Faster Invoice Processing

Invoice Processing utilizes a shared Accounts Payable or AP mailbox. Emails are assigned to team members based on the type of invoice. This was done to ensure that each invoice was processed promptly in Microsoft Dynamics 365 ERP system.

2. Eliminating Backlog in Accounts Payable

Weekly pay runs were managed efficiently, with urgent invoices prioritized. Backup AP Analysts stepped in when the primary AP Analyst was absent assuring our client continuous accounts payable outsourcing services.

3. Handling Vendor Queries

A follow-up tracker was created to monitor pending vendor queries. This ensured that all queries were addressed promptly, and any issues were quickly escalated to the client.

4. Tracking and Follow-Up for On Time Vendor Payment

ARDEM account payable management system tracks incoming invoices invoice aging. Our client could receive real-time status on invoices in the account payable workstream. No invoice is missed in processing.

B. Helping our client with ARDEM Utility Bill Management Solutions

1. Using ARDEM Utility Bill Tracker to Eliminate Missed Payments

ARDEM introduced the ARDEM Utility Tracker, a live tool that tracks every bill from receipt to payment, acting like a 24/7 vigilant assistant. This ensured that no bill was missed, and payments were made on time.

2. Using ARDEM Capture Platform for Efficient Utility Bill Processing

ARDEM Capture, a cloud service platform is available to ARDEM Utility Analysts to process bills efficiently. This Man+ Machine technology ensured correct and fast utility bill processing.

3. Helping our client transition to Electronic Billing

ARDEM provided the administrative services to transition all utility bills to be delivered to our client in digital format. All utility bills are now received as email attachments which are easier to track and manage in the vendor email in box. Mapping each utility bill to each store ensured that bill receipt could be tracked every month. This ensured that no bills were missed, no utility bill payment was late, no utility bill payment was missed, and there was no service disruption.

4. Utility Bill Payment Management to Eliminate Service Disruption

ARDEM sorted utility accounts by payment type, prioritizing checks. Checks were processed and sent immediately, with email confirmations to vendors. If checks were not received within two weeks, ARDEM authorized credit card payments and voided the original checks, ensuring prompt payment.

5. Forecasting Cash Flow with Utility Bill Expense Forecasting

Using historical utility bill data, ARDEM could forecast utility bill expenses for our clients. Forecasting of upcoming expenses benefited our client with their cash flow forecasting.

Success: How Our Client Benefited

1. All Bills Paid on Time

Having a skilled team of AP Analysts on this assignment helped. Making the process improvement to electronic bills helped. Using technology with better tracking of utility bills, capture and cloud platforms allowed for application of process automation.

2. Elimination of Utility Service Disruptions at Stores

Setting up a Utility Bill Management process for our client ensured that utility bills were paid on time and eliminated service disruptions at the store. Our client saved costs related to service disruptions and costs related to re-installing the service.

3. Elimination of Late Fees on Utility Bill Payments

Efficient utility bill management ensured utility bill payments were made on time and eliminated all late fees. Our client saved money.

4. Access to Best Practices in Account Payable and Utility Bill Management

We applied our best practice experience to help improve the account payable and utility bill management processes for our client. Process automation technologies were applied where applicable for process improvement. Our client has achieved success in the outsourcing of their account payable and utility bill management processes.

5. And Cost Reduction

The outsourcing of the accounts payable process and the utility bill management process has resulted in cost reduction for our client.