VIDEO: How to Find the Hidden Costs in Your Invoicing Processes
A core mission for ServiceChannel is to help both facilities managers and contractors identify and slash what might be called the “hidden” costs of inefficient operations. Sometimes this number can be eye-opening, such as the $20 billion in hidden costs that retailers may be incurring by simply outsourcing their FM responsibilities too much.
But more often than not, these hidden costs tend to be small and may be even inconsequential when viewed as a stand-alone entity. That’s precisely the reason these costs tend to stay hidden – they may be trivial enough to be annoying but not big enough to appear on your radar with blaring warning signals.
Take, for example, the cost of processing an individual invoice that is usually the domain of a company’s Accounts Payable department. According to a recent article in CFO.com, the cost A/P incurs in processing a single invoice can range from $2.07 among the top performers all the way to $10 among the laggards.
However, when you extrapolate this hidden cost across a highly distributed enterprise, the total sum can invoke justifiable sticker shock. A case in point is a company such as Ferguson, the largest distributor of plumbing supplies in the United States with more than 1,400 offices and showrooms.
Before deploying the ServiceChannel Service Automation software platform, Ferguson relied on a national network of more than 7,000 contractors who all could be submitting invoices for services rendered at any given moment. Without an efficient way to process all those invoices, the overall costs – hidden or not – can be substantial.
Visibility is the Key
The solution to finding something that is hidden is better visibility, of course. That fact is explained quite well in this short video below from Justin Hapaala, a senior accountant at Wagamama, which operates more than 140 Japanese-themed restaurants throughout the UK.
As Justin states, having the visibility of the electronic invoices tied to specific work orders early – through access to the Service Automation platform – was the the key to driving more efficiencies and ultimately cutting costs. This is compared to the old method of the accounting team’s having to process all the invoices only when they physically received the bills.
Visibility is only the first step. More advanced use cases made possible through ServiceChannel include integrating our platform with accounting/financial software systems through APIs that make end-to-end invoice and payment processing as seamless as it can be.
Other advanced use cases can include establishing not-to-exceed (NTE) pricing, which can be used to approve or reject routine invoices (e.g. for recurring planned maintenance work orders), thereby freeing up time for FM and A/P departments to tackle the outliers. This is also known as the management-by-exception rule.
For more information on ways to modernize your invoice and payment process, take a look at how the ServiceChannel Invoice Manager functionality can drive improved efficiencies while cutting costs, hidden and otherwise. You can also request a demo for a deeper dive view.
Hidden costs may be stealing you blind without your knowing anything about it. And in this instance, ignorance is definitely not bliss.