Panasonic Automotive Trends And Future of Automated Accounts Payable

Panasonic Automotive Trends And Future of Automated Accounts Payable

By Dhiraj Cherian, CFO, Panasonic Automotive [TYO: 6752]

Dhiraj Cherian, CFO, Panasonic Automotive [TYO: 6752]

Dhiraj Cherian has proven years of experience in leading large privately held and multinational corporations towards diverse growth in accomplishing a financially progressive future. Mr.Cherian brings a global perspective and long-term vision from doing business in Asia, Americas, Europe, and Middle Eastern regions with strong operational know-how and industry expertise in automotive, consumer products, education, energy, industrials, and technology. He has an excellent track record of delivering improved financial profitability and performance, across multi-functional and multi-cultural teams is down to the leadership ability to motivate and trust-building in his repertoire.

Dhiraj Cherian, an extremely seasoned and successful professional, exclusively talks to CFO Tech Outlook for a special edition of Accounts Payable 2019

What are the technological trends that you see in the Accounts Payable landscape?

The three-way matches in ERP systems—the purchase order, the delivery note, and the vendor invoice—have become a staple of accounts payable systems today. However, when a business grows and expands across the globe, it will find the saying ‘one size doesn’t fit all’ to be increasingly relevant. When companies are glocalizing for a particular market, they might have to follow the rules and regulations of the market, such as procurement of locally sourced materials and labor. In addition, the cultural differences in the market, logistics and cost may make it efficient to procure from within that marketplace. Local vendors might operate manually or via an automated order system, which is substantially different from that of your company. If the market and transaction volume are considerably large, the chances of automation are high. Orders and payments are automated and paid via ACH or wire transfers. Vendors increasingly accept purchasing cards, and newer payment methods like Apple Pay and Venmo. Trends indicate a higher movement toward automation owing to its convenience, cost-saving nature and market reach.

"Companies have interconnected themselves with their customers and vendors through means of an automated system, which can handle scheduling, mapping demand, and placing orders"

What are the challenges in the field and ways to find the right solution providers?

Challenges vary by industry. Some companies have interconnected themselves with their customers and vendors through means of highly integrated systems, which handles customer order taking, production scheduling, demand planning, and order placement to vendors. Others process payments on in-house systems or piggyback on the numerous vendor solutions that promise to customize and meet your unique needs.

Electronic marketplaces of the likes of Ariba, eBay, and Amazon are profitable platforms where not only individuals but also companies can participate in selling or buying. However, one cannot expect this level of standardization throughout the marketplace. Even some of the global suppliers do not accept global contracts but negotiate it regionally in terms of discounts, IP use, etc. It depends on the number of regions in which you operate. As the numbers go up, the differences become more apparent, which makes it hard to standardize.

Inform us of any interesting projects and initiatives that your organization undertook.

One major area in accounts payable we are working to improve is linking the orders from customers to the placement of our orders with the vendors. When a customer revises an order and the inventory quantities change, the system recalculates the material demand, and it automatically issues an order revision to the vendor. Though not entirely automated with every vendor, the purchase order will be updated almost in real-time. It is an area that we are looking to automate further, to proactively address market capability and increase efficiency.

What is the transformation you see in the future?

Multiple technologies out there make the future seem promising. For example, RPA can help by relieving people from the redundant job of compliance verification using software. Managing thousands of vendors can become tedious, where RPA can help by automating the procedure. Standard operating procedures (SOPs) make it easier to implement automation, though in our case, processing is more complex with qualifications, diagrams, etc. before we can approve invoice payments. Vendors are relatively standard and you have a varied choice in the market.

What would be your advice to fellow peers?

Technology grows by the passing second, but as a business one should be clear on your technology gap to address the need. I recommend not jumping onto the new-tech bandwagon just because an eye-catching technology is making its rounds. Know your market conditions are and determine how they might change tomorrow. Set meaningful KPIs.

A perfectly aligned marketplace and a decent IT budget are staples for a faster and effective automation roadmap. When considering new technologies such as chatbots, RPA, and blockchain, absolutely link their vaunted capabilities to tangible improvement in operations. Confirm if the enhanced automation process is structured to leverage the technology’s advertised benefits and, both operations and vendors are geared to support the upgraded platform. Utilize contracted rate cards or engage purchasing to get the best value pricing. The cost of operation and ownership should by justified else, you may not achieve a timely or decent return on the investment.

Read Also

Fostering a High-Growth Mindset Through Collaboration

Fostering a High-Growth Mindset Through Collaboration

Sandeep Pisipati, CFO, Coyote Logistics
Upcoming trends and technological advancements in the Accounts Payable space

Upcoming trends and technological advancements in the Accounts Payable space

Sandra Clarke,Chief Financial Officer, Blue Shield of California
How Peterson Auto Group Shifted from Reverse to Overdrive with AP Automation

How Peterson Auto Group Shifted from Reverse to Overdrive with AP Automation

Patsy Price, Director of Operations, Peterson Auto Group

Weekly Brief