The best way to improve your process would be to look at why invoices are paid late, which is your largest issue (see exhibit 1 of the pareto chart showing supplier complaints). Paid late invoices is the number one complaint from suppliers with 342 late payments that make up 54.20% of total complaints ( see exhibit 2 for data table of Pareto chart). Just six categories of complaints make up 80% of the total complaints; Paid Late, Other, Check sent without invoice reference, Payment never made, Wrong invoice referenced, Paid short. Making changes to the Lead times and Processing times of invoices will help reduce the amount of complaints from …show more content…
Invoices being paid late is what is drawing a majority of the complaints that you are receiving from suppliers. This issue can partially be be solved by changing the process that moves invoices through your system (see exhibit 3 for total processing system in order). The process that gets invoices ready for payment through the mailroom and AP has excess lead time that can be changed to benefit your company. The current total lead time for a “pay now” invoice is 93 hours (see Exhibit 4 for lead time processes). Indeed, 93 hours an invoice is not being paid. Looking at this process currently, there is a 1 day backlog from once the mail is received. We recommend removing this step, which would reduce your lead time by 8 hours. In an effort to reduce the chance of a making a late payment, mail should be opened immediately upon being received, This recommendation will reduce the lead time of the overall process (see exhibit 5 for changes in the processing