Managing AP and AR
A software company based in US has its Offshore Delivery Centre in India. The company follows certain specific policies with regard to accounts payable (AP) and accounts receivables (AR), which they wanted India office to follow.
Business process outsourced to us is of maintaining AP and AR based on the policies formed by US office and reporting the variation at a set frequency. We were also asked to make sure that funds requirements is managed that no outstanding is beyond 60 days.

Why was Business process outsourced?
Any long outstanding AP or AR is a sign of some conflict, non delivery, problematic delivery etc.
Effective management of AR/AP can ensure optimum utilization of funds and thereby reduction in Finance.
No audit qualification and good bankers rating is important to indicate better credentials of good pay master.

Process functions executed:

• Understand the US policy
• Convert it as India policy
• Train recovery and purchase persons about this policy
• Make it a standard term of PO and Order acceptance
• Periodically reviewing AR and AP accounts and follow up with the parties
• Effect payments/ receipts
• Handle exceptions with the help of concerned project/purchase head
• Monthly reports on APs/ARs to India and US accounts

Challenges ...
To work in tandem with purchase and recovery team to adhere to strict US guidelines

Key success ...

• We have established a very successful fund cycle which has relieved the CEO India of the burden of funds planning completely.
• Cost of funds was minimized.