In the majority of South African organisations, accounts payable is centralised.
This emerged from the invoice automation survey conducted online from 2 to 16 June by ITWeb in partnership with Kofax, with 81% of respondents indicating the accounts payable in their organisations is centralised.
"There are many benefits from an accounts payable being centralised, such as standardised and streamlined transactional work formerly done by each operating unit; and resource savings through elimination of duplicated activities in operating units," says Yvonne Mayer, marketing programmes manager at Kofax.
Consistency in statutory requirements to compliance and standard approach to interpreting laws (withholding taxes, sales taxes, payments of statutory dues centrally, which ensures adherence to deadlines) as well as adherence to internal policies and procedures are other benefits of being centralised, Mayer says.
"The development of domain expertise, allowing the company to do more with fewer people, with better quality work and the ongoing development and implementation of process improvements are the added benefits of having a centralised accounts payable centre," she adds.
However, there are many downfalls for organisations that do not have a centralised accounts centre, she warns.
These include missing on time payments and, therefore, losing cash discounts; lack of effective customer/supplier communication and interaction; impact on productivity and throughput; higher error rates when using a manual process; inability to effectively comply with regulations and tax policies; and lack of visibility (with analytics) to spend and cash management, she explains.
According to the survey, the majority of organisations' payments (43%) are made within 30 days, 31% are made early with a discount, and 20% fall within 45 days.
The survey further revealed 33% of organisations are already migrating to the cloud, 9% are planning to migrate to the cloud and, as expected, a small percentage (5%) said they prefer to keep their operations on premises due to IT performance and uptime concerns.
Mayer believes cloud services for accounts payable is able to advance the accounts process as this method allows a company to treat investment as capital expense and not operational expense, and also has lower implementation costs.
"With cloud there is no need for extensive technical knowledge of infrastructure and there are guaranteed service levels to ensure business continuity," Mayer adds.
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