The COVID-19 crisis is putting unique pressures on accounts payable teams. Their continuity plans are getting tested to the extreme as the unprecedented circumstances force teams to figure out innovative ways to process and pay invoices.
To get a better understanding of how accounts payable teams are responding to these challenges, we invited Tammy Johnson, Director of Accounts Payable at First Advantage, and Rock Persaud, Director of Accounts Payable & Global Payable Systems at Take-Two Interactive Software, to join our virtual summit, Paradigm Shift, and share their experiences.
Here are a few things we learned from the discussion.
Preparation is everything
Few accounts payable teams were as prepared for the COVID-19 crisis as the team at Take-Two Interactive Software. Their Director of Accounts Payable & Global Payable Systems, Rock Persaud, has spent significant time building a robust business continuity plan to ensure the department can function no matter the circumstances.
“Everything stops if accounts payable cannot pay the bills,” says Persaud. “So it’s critical to have a plan in place to deal with the unexpected.”
Persaud explains their plan contains detailed steps the team must take in the event of many unique crises. These include terrorist attacks, blackouts and weather events. And getting feedback and input from the team to ensure they considered every possible situation he’s made sure to leave no stone unturned. Their plan goes so far as detailing the home landline numbers of every person within the company accounts payable interacts with to ensure the lines of communication stay open if the cell network goes down.
“Everything stops if accounts payable cannot pay the bills."
It’s one thing to have a plan, it’s another to make sure it works, says Persaud. So he constantly pressures tests the plan by nominating a single member of the team to work under the crisis conditions for a day every quarter. “We document and resolve any difficulties they have,” he says. “For instance, we assumed that all our team members would have a suitable computer to use to work from home. But we quickly discovered that assumption was false. And, to solve the problem, we shifted everyone in accounts payable onto laptops that they can use in the office or at home."
All this effort means that when a crisis hits, like Hurricane Sandy in 2012, or the current COVID-19 pandemic, the team can operate as normal. “It’s businesses as usual,” he says. “We’re even able to stay on track and roll-out projects we’re working on, which is a great sign that we’re experiencing very little disruption to the day-to-day processes.”
Being fully digital puts account payable in the best position to ensure business continuity
While the accounts payable team at Take-Two have near-seamlessly transitioned to the “new normal” brought upon us by the crisis, there is always room to improve. For instance, despite the team shifting to e-invoicing, they still largely rely on printing and scanning as part of their accounts payable process.
“This could have posed an issue if we could not get the equipment needed to the homes of my team before the Governor locked New York City down,” says Persaud. “Thankfully we moved quickly so it wasn’t an issue, but, the risk is very real.”
For that reason, Persaud is more determined than ever to push through his e-invoicing project and fully digitize the accounts payable department. “In hindsight, I wish I learned more about the digital opportunities in accounts payable sooner,” he says. “And I wish we launched an e-invoicing project years ago. It’s the last piece of the puzzle to ensure our continuity plan is watertight.”
There are always opportunities to drive positive changes during a crisis
At First Advantage, Director of Accounts Payable, Tammy Johnson, is using the crisis to drive positive change in her organization and its supply chain. In particular, she's using the current crisis as a catalyst to shift paper out of the supply chain by getting suppliers to accept digital forms of payment, like virtual cards, instead of checks.
“When we’ve discussed digital forms of payment with our suppliers they’ve rarely been keen to make the switch away from checks,” says Johnson. “However, at the beginning of the crisis, a few suppliers got in contact asking if we could pay them using cards as they were unable to get into the office to access any checks that came through.
“We’ve used the crisis as an opportunity to teach the organization about how virtual cards can readily support any ad hoc spend while ensuring budget holders retain control."
This was a lightbulb moment for Johnson who saw the opportunity to approach First Advantage’s other sellers again to shift them over to digital payments. “I asked a member of the team to comb through our vendor master data and approach those suppliers still accepting checks. And, unsurprisingly, many of them were keen to discuss getting paid using cards.”
Johnson has also used the crisis to push through change internally. “We’ve used the crisis as an opportunity to teach the organization about how virtual cards can readily support any ad hoc spend while ensuring budget holders retain control,” she says. “This is another positive step in the right direction towards digital.”
And Johnson expects to see the shifts to digital to accelerate coming out of the crisis. “The crisis has proven that digital is the only way forward,” she says. “I expect to see an acceleration in accounts payable departments working to remove paper from their operation by shifting to digital workflows and switching suppliers over to digital payment methods like virtual cards.”
The future of accounts payable is exciting
The COVID-19 crisis and subsequent events have certainly given accounts payable teams a lot to think about. It has once again highlighted the criticality of the department in ensuring business continuity. And it’s also shown that teams must put in the work to prepare for the unexpected.
Want to learn more about how to future proof your accounts payable department? Join one of our 20 minute walkthroughs to see what Tradeshift can do for you.
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