Upcoming trends and technological advancements in the Accounts Payable space

Sandra Clarke,Chief Financial Officer, Blue Shield of California

Sandra Clarke,Chief Financial Officer, Blue Shield of California

We have started on a multi-year plan at Blue Shield of California to improve the efficiencies of our accounts payable processes and deliver enhanced service to our business. CFO oversight of Accounts Payable is always a balance of payment strategy, controls, and administrative cost. At Blue Shield, my goal is to standardize and automate as much of the routine processing as possible, leaving my team the capacity to focus on analytics that drives improvements to our payment strategy.

Investments in agile and flexible technology are crucial to reducing long term expense and providing a scalable platform. The challenge is how to prioritize among multiple technology options.

Before starting any economic transformation, the organization needs both a technology and a strategic architecture that provide the “North Star.” You cannot engage the team to implement if no one understands the end goal.

With that in mind, our company has laid the groundwork for our next phase by migrating multiple data sources into one unified cloud ERP, standardized reporting and step 1 analytics, standardized and simplified month-end processes, and implemented a vendor virtual payment program.

That lays a solid foundation. So what’s next?

For the rest of 2019, we will focus on improving access to data with better tools for easier self-service reporting and automating audit controls and exception handling. We will also enhance system configurations so that monitoring compliance is more comfortable when policies change in the future. Also, we will extend our view to a five-year plan for Financial Transformation that includes specific business changes in Accounts Payable.

"Investments in agile and flexible technology are crucial to reducing long term expense and providing a scalable platform"

A primary focus for next year is to shift from outsourcing routine processing to using robotic process automation. This shift will improve consistent data capture for analytics and reduce errors. We can improve the processing time and provide more real-time payment status information to vendors.

These changes move our team away from answering the same question for multiple vendors (when am I going to be paid?) allowing more time for problem-solving. Blue Shield already requires electronic invoicing from many suppliers. As we ramp up the automation of Accounts Payable, it will be essential to expand this requirement and standardize the invoice format.

Employee travel and other expense reimbursement is a critical part of Account Payable; it also requires significant time to answer questions and resolve problems. Blue Shield moved to a best-in-class T&E tool several years ago. This year, we refined the system to provide employees with more clarity, enhance oversight, and improve reporting. T&E will remain an area of challenge and focus. Increasing the available data offers Accounts Payable staff with the information to quickly and accurately resolve questions.

As we free more time for the Accounts Payable team, they can study payment patterns and identify problem areas, resolve process delays and reduce late fees.

Fraud prevention is a continual focus for Accounts Payable. I am interested in exploring the progress in blockchain technology as a potential tool in this effort. Blockchain has a lot of promise. Using it will require like-minded vendors who are willing to invest in this area. Blockchain transactions must be faster before it is an efficient option for validating and processing invoices.

Traditionally, 90% of Accounts Payable administration expense is spent monitoring less than 5% of overall spend. At Blue Shield, our goal is to have that 5% be the most unique, impactful spend while we leverage technology to support the other 95%.

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