Intensive negotiations were conducted, discount terms were agreed upon, and savings were factored into purchasing plans. However, the hoped-for savings are not materializing and therefore do not appear on the balance sheet. How can this be?
The simple answer is that the accounting department is not paying according to the agreed-upon terms of payment. In most cases, this is due to faulty processes, which result in lost discounts. Perhaps the accounting department is using payment terms from a source other than the one maintained by the purchasing department. It is also possible that payments are being made according to the payment terms on the invoice, which the supplier has not updated. Another reason could be that there are different vendor numbers for a single vendor, resulting in payments being made under different payment terms.
Process errors of this kind can be quickly identified with WebCIS. Options include determining average payment periods, viewing creditors at the level of consolidated creditor numbers, or analyzing the payment periods for incoming payments in the sales process. Such cross-departmental processes between purchasing, accounting, and sales can be easily analyzed, opening up opportunities for targeted optimization. The goal should be a uniform and transparent payment strategy in order to maximize the maximum account balance.
