Rick Yvanovich/Founder & CEO/
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Not long ago, we discussed about the gap between strategy execution and alignment as well as ways to bridge the gap with the Balanced Scorecard. Technology plays an important role in facilitating strategic performance management. A scorecard-enabled solution must support a number of management processes. The critical processes outlined by the Cranfield School of Business (2003) are:
Previous blogs have discussed the important role of accounts payable management to the financial benefits of retail industry and the many advantages of accounts payable automation. Accounts payable automation, workflow, and e-invoicing have been in place for a long time as a remedy for common AP problems due to manual entry. Althought, AP automation can enhance accounts payable management and financial management greatly. However, many companies are still sticking with their manual processes. Why is this? There are certain barriers for AP automation; understanding these obstacles is an important step in overcoming them.
CIMA member DF is not sure whether her situation is classed as an ethical conflict or not. She worked for eight years as a finance manager in a large public sector organisation, including a stint as a manager in the department responsible for procurement, contracts and bids.
To effectively bridge the gap between strategy and execution, it is vital that companies address 4 areas: corporate goal clarification, process alignment, measuring and monitoring, integration and communication. The Balanced Scorecard, created by Robert Kaplan and David Norton, has emerged to be a powerful strategy management tool as it makes strategy become “everyone’s everyday job”.
Many companies, especially ones in the retail industry—where accounts payable (AP) activities and transactions with vendors and suppliers are a critical part of the business’s operation—have been investing in e-invoicing and accounts payable automation as a solution to those AP problems caused by traditional manual entry.
In the last post, we outlined the alarming issue of a strategy gap in businesses nowadays and how it can be undesirably widened by failures in strategic planning and budgeting. To gain a competitive advantage and increase business resilience, companies need to bridge this gap between strategy and execution, the task that requires serious dedication from everyone in an organisation. There are four factors of an effective strategy and execution alignment, from conveying what corporate goals really mean to identifying how they should be achieved.
The previous article has emphasised the impacts of AP on vendor relationships, and a well-managed AP can enable companies to take advantage of vendor payments. Findings from an Aberdeen Group survey demonstrate that several other factors encourage companies to focus on their accounts payable, such as a lack of visibility into invoices and AP documents, the high cost of the invoice process, and cash management.
FC is a CIMA member and has worked in the finance department of a medium-sized UK wholesaler for just under a year. A colleague has informed him that the head of sales has been unlawfully declaring fuel benefits. The value of the benefits is relatively high for the size of company, which is not in great financial shape. This has resulted in a National Insurance (NI) Contributions bill that would probably be large enough to push the company into insolvency. He is in a dilemma.
It is hard enough to come up with an effective corporate strategy. It is even harder to execute that strategy effectively to achieve desirable outcomes. A 2009 study on employees found that 70% of them were confused about what they needed to do to support their company’s strategy. The same study, published in Fake Work by Brent D. Peterson & Gaylan Nielson, Simon Schuste, “half of all the work people did had nothing to do with their company’s strategy”. For the last dose of alarm, 73% of surveyed workers did not think their company’s goals are translated into specific executable work.
Amidst the fiercely competitive environment of an economic downturn, along with closely maintaining customer relationships and searching for ways to boost sales and profits, retailers must pay attention to cost cutting as a way to enhance their profit margins. One area that can bring significant material benefits to retailers is their accounts payable (AP).
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