AberdeenGroup recognizes big-box retailer for best practices in invoice management
Sunnyvale, CA — July 26, 2005 — Big-box retailer Best Buy Co. Inc. has been recognized for its ability to transform accounts payable into a strategic business function impacting the organization's bottom line.
In a new report titled "Accounts Payable Success Stories, AberdeenGroup explores the strategies required for design, deployment and ongoing success of invoice reconciliation and payment processes. The report includes seven best practice case studies that highlight the value accounts payable can deliver to an organization. Best Buy and the other case studies were selected from a review of nominated accounts payable programs from a variety of industries.
In the report, AberdeenGroup discusses how increasing cost pressures in the retail industry challenge organizations to be rigorous about maximizing profits, and how Best Buy responded to that challenge by building an accounts payable program that was able to successfully enable suppliers, reduce costs and collect rich data to support spend analysis and demand management, especially for non-merchandise categories.
Best Buy deployed Ariba Invoice and saw benefits in several critical areas. Invoices are validated at several stages in the process, to improve data accuracy and to allow more sophisticated invoice tolerances on product, freight, tax and handling fees. Level 3 invoicing details are captured on every invoice. Real-time dispute collaboration and supplier visibility into the reconciliation and payment status creates an efficient closed-loop process with suppliers.
Today, more than 100 Best Buy suppliers are participating in that closed-loop process and are enabled for electronic invoicing, with 70 percent of the suppliers using Ariba Invoice. Best Buy is now able to collect level 3 data and use that data to more effectively source and mange spend. The company has been able to reduce full-time resources by providing suppliers visibility into reconciliation and payment status, thereby reducing the number of supplier inquiries.
For more information on the current state of the payment solutions market, see the article "The Analyst Corner: Payment" in the December 2004/January 2005 issue of Supply & Demand Chain Executive.
