If you work within the public sector you could be forgiven for feeling more than a little anxious over the last couple of months. You’ve been aware that cuts are coming, but you didn’t know when, how much, or if they’d affect you directly. Many of those within the corporate sector have been under the same cloud, though perhaps without the same inevitability.
So, if your organisation is facing cuts in spending, and a freeze on all projects – including the technology freeze (which appeared 3rd on David Cameron’s target list in the public sector) - how can you still deliver a best practice team, and the added value the CFO is asking for? Surely a limited workforce equals a limited output?
Well, yes and no. Obviously if you suddenly have 3 staff members where previously you’d had 5, there will need to be a series of adjustments. However, this is where adherence to structure can come into its own. Without doubt there are limits – it’s not possible to continue to cut the workforce without affecting quality, but many organisations have a degree of room for manoeuvre.
There is no doubt that the next six months will be difficult to negotiate for many organisations. Many of the problems facing business six months ago are still with us, despite a small increase in public spending and a nervous recovery in the housing sector. With the globalisation of our economies, no industry or country is able to remain aloof from the troubles affecting another. In short, we are all tied together in an ever elaborate tangle of corporate debt, trading partners and overseas ventures - which in the good times help to create a powerhouse of trade and wealth, but in times where trade is contracting, actually accelerates it.
You may wonder where AP is affected by all of this, but if your supplier is trading in Greece for example and is unable to call in its debt, your supplier is going to be looking for longer payment terms from you. As always, the cash flow of any organisation is critical to survival, and AP has to do its part in making sure that the wheels of business run smooth.
The only sensible way to do this is by keeping a tight rein on who does what and on how they do it. Read (or create) your office bible – and really stick to its rules. You may come across the “I’m too busy to learn new methods of practice” individuals, but nobody really wants to be, or wants to work with the “busy fool” – so perseverance and gentle persuasion is the key!
Key Ways to Keep the Cash Flowing From Now till December:
- Pay invoices on a predetermined schedule of the company’s choosing
- Ensure the accuracy and authenticity of invoices
- Process AP paperwork with a minimum of handling and expense
- Maintain & oversee new account opening procedures
- Appoint one key person to input data to the Master Supplier file
- Implement approval authorisation limits
- Automate your reconciliation process (you may have to push for this)
- Use a bolt on best of breed supplier to your ERP for duplicate payments
- Educate and train staff