Accounts Payable Workflow

Overview

Pride’s accounts payable (AP) workflow suffers from process inefficiencies and capacity constraints that have caused delayed supplier invoicing, supplier payment delays, and in some cases, suppliers cutting off deliveries. This directly impacts operational continuity and supplier relationships.

Current Process Flow

1. Invoice Receipt: Supplier sends invoice via email to general inbox
2. Manual Entry: Finance team (or CEO) manually extracts invoice details and enters into Xero
3. CEO Approval: Mat reviews and approves payment (spending gate)
4. Payment Processing: Payment authorised and processed
5. Supplier Follow-up: Emily Rose chases payment confirmations with suppliers

This flow is characterised by:

• Double-handling (email receipt + manual entry)
• No automated invoice validation or duplicate detection
• Single point of approval (CEO)
• Reactive rather than proactive payment scheduling

Documented Issues

The improvement log identifies three critical suppliers affected:

• FIN-001: Supplier A — delayed invoicing; deliveries curtailed
• FIN-002: Supplier B — delivery delays cascading to operations
• FIN-003: Supplier C — stock shortages affecting whole weeks of operations

All three issues relate to late invoice processing and payment delays, not supplier performance failures.

Root Causes

1. Process Inefficiency: Manual invoice entry adds 1–2 days delay per invoice
2. Capacity: CEO approval bottleneck; Mat cannot review all AP items daily
3. Visibility: No proactive AP calendar; payments reactive to supplier complaints
4. Performer Load: Emily spends significant time chasing confirmations instead of strategic work

Recommended Improvements

High Priority (Implement 2–4 weeks):

• Suppliers send invoices directly to Xero inbox (zero-touch receipt)
• Implement three-way matching (PO, receipt, invoice) to validate before approval
• Set approval limit for CEO; delegate smaller payments to Operations
• Document AP approval SLA (e.g., pay within 7 days of invoice receipt)

Medium Priority (4–8 weeks):

• Set up automated payment reminders (Xero to CEO when invoices reach 5-day-old threshold)
• Create supplier communication template for payment status proactively
• Track on-time payment rate as KPI

Long Term:

• Implement integrated purchasing (PO → receipt → AP → payment in single flow)
• Move to supplier-initiated payment plans (recurring/scheduled invoicing)

Impact

Without AP workflow improvement:

• Supplier relationships continue to deteriorate
• Stock shortages continue to affect operations
• Cash flow forecasting remains unreliable (cannot predict payment dates)
• Emily’s strategic capacity remains constrained by manual chase work

Related Pages

• Supplier Management — supplier relationships and performance
• CEO Bottleneck — approval constraints affecting multiple workflows
• Cost Reduction Strategy — cost optimisation through process efficiency
• Operations - Improvement Opportunities — tracking and prioritisation framework