Two Sides of the Same Coin

With 20+ years in automating financial operations, it continues to strike me funny that people often approach payables from only the perspective of either:

1      the seller – the Receivable

2      the buyer – the Payable

Taking this stance in software design shortchanges both parties.

My observation is these are actually two sides of the same coin.  After all, there can’t be a payer without a seller and vice versa.  A solution that works well will recognize each side has its unique and special requirements distinct from the other. And just as important, appropriately integrating these two practices is the key to strengthening the individual processes and the overall financial workflow.

Heads or Tails – It’s Complicated

Both sides have several disciplines that need to come together to make things happen.

Consider the case with a consulting firm where the Payable is a bill for time and expenses related to a project for a client.  Here in addition to the AR Department who is responsible for creating and delivering the bill to the client there is also the project manager or bill owner as I call it who is responsible for reviewing the bill to ensure it includes everything that should be billed and nothing that shouldn’t.

On the client or buyer’s side there is the AP Department who receives the bill that they call an Invoice, and forward it to the invoice owner.  This is the person who can confirm the seller delivered the services in the invoice, and the amounts are as agreed.  Once the invoice owner approves the invoice, the AP Department enters the invoice into their AP application noting the liability due the seller.  Treasury then controls when to settle the invoice.

The Payables Community

There is then a community of a sort that surrounds every payable.  This community includes all the disciplines and their associated business applications from both the seller and buyer.
Among these disciplines are:

• Accounts Receivable – Seller
• Accounts Payable – Buyer
• Treasury – both Seller and Buyer
• Accounting – both Seller and Buyer
• Procurement – Buyer
• Tax – both Seller and Buyer
• Audit – Buyer

The Networked Business and the Community

A key aspect of the power behind the Networked Business is recognizing groups such as the Payables Community, and coordinating the flow of information to its members.  The Networked Business not only enables sharing of information between disciplines and the applications used, but perhaps more importantly delivers user experiences optimized for the requirements of each discipline’s task within the community.

Payables Guy Audience

The purpose of the Payables Guy is to help the Payables Community understand and ultimately implement the power of the Networked Business. My goal is to use concrete examples that the community can learn from and apply – strategically and tactically – the two new sides to the coin.