Optimizing Back Office Operations: Best Practices to Maximize Profitability

Preface ix

CHAPTER 1 Profits: The Reason a Business Exists 1

Profitability Defined 2

Profitability Equation and Related Metrics 9

Liquidity, Growth, and Financial Flexibility 19

Conclusion 25

CHAPTER 2 Cost and Capability: Strategic Choices 27

Capability: One Size Does Not Fit All 28

Cost: You Get What You Pay For 34

Measuring Capability 41

Conclusion 44

CHAPTER 3 Financial Supply Chain: Entering the Gold Mine 45

What Is the Financial Supply Chain? 45

Working Capital Defined 50

Working Capital Processes 59

Conclusion 65

CHAPTER 4 Platform for Execution: A System for Maximizing Profits 69

Process Benchmarking 74

Process Optimization 86

Process Automation 86

Process Integration 88

Process Standardization 89

Conclusion 92

CHAPTER 5 Optimizing Accounts Payable 95

Implications of A/P Effectiveness 97

Best Practices 99

Enabling Technologies 115

Conclusion 122

CHAPTER 6 Optimizing Accounts Receivable 125

Implications of A/R Effectiveness 126

Best Practices 130

Enabling Technologies 137

Conclusion 144

CHAPTER 7 Optimizing Purchasing 147

Implications of Purchasing Effectiveness 149

Best Practices 152

Enabling Technologies 160

Conclusion 168

CHAPTER 8 Optimizing Treasury Operations 171

Implications of Treasury Effectiveness 175

Best Practices 179

Enabling Technologies 193

Conclusion 200

Epilogue 203

Index 207