As the CFO/COO of a staffing firm, can I save money for the company by automating the contract to payment process with my corp-to-corp suppliers?
VMS providers like Fieldglass and IQNavigator provide automation with the staffing agencies’ customers, but when it comes to automation with staffing agencies’ suppliers, the old-age process is still followed except more people are using email than fax.
In the past 2 years, I have worked with big staffing firms such as Manpower and NTT Data as an IT contingent worker and noticed that even in this day and age, some processes are still low-tech and costly, such as invoicing.
Imagine a staffing firm that has 100 consultants from its subcontracting companies (suppliers) and gets bi-weekly invoices for each. Someone in the accounts payable department receives all these invoices through email or fax, and manually checks each against the timesheets, entering the data in their financial system. That would be 200 invoices per month and industry research shows that it costs on average $5 to process one invoice. So processing the invoices for those 100 IT contingent workers would cost the staffing firm is spending $1,000 every month.
What are the reasons for the automation being done only in the case of dealing with staffing agencies’ customers and not while dealing with staffing agencies’ suppliers?
- Is it because no one realizes the cost/time spent by the Accounts Payable department?
- Is it because some companies have outsourced this effort?
- Is it because of lack of tools?
Is there an opportunity to build a network of staffing companies where each company can communicate with each other through a dedicated platform and all the data goes to the right places without any manual effort? Are there any other ways of reducing this cost and ultimately increasing the bottom-line? I think there is. This is certainly done in other industries where the accounts payable is completely automated and buyers and suppliers have a network that will be leveraged to reduce the operational costs and thus generate savings for all the parties involved.
I would encourage others in the industry to share their thoughts. I welcome any ideas on the topic. Please comment below.
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