Updated: January 25, 2023
In October of 2019, I published the blog post “Merger or Acquisition? 5 Steps to Merge Vendors into Your Vendor Master File” on one specific area of a merger or acquisition. Robert E Bendetti, JR, CPA, (Bendetti) my podcast guest, discusses three other areas that Accounts Payable (AP) should be focusing on during this critical time.
The goal of AP processes is to automate to eliminate manual processes and this is still the case during a merger or acquisition. According to Bendetti, the key is to identify the current processes of both companies, then assess whether they need to be done at all. Lean the manual processes first, then automate, and according to Bendetti, here is one scenario where AP can take advantage of Robotics Process Automation (RPA):
RPA for Multiple Accounting Systems/ERPs – if you are doing a “lift and shift” where you are inheriting the Accounting System/ERP from the acquired company – consider adding rules-based “bots” to talk between the systems. New to RPA in AP? Check out my RPA posts here.
Tackle Cash Management
Cash management when you are blending companies can be complicated. Payment terms, payment methods, and payment cycle schedules even within the one company and often between multiple Accounting Systems/ERPS – were different. Bendetti offers the following tips:
Review Cash Management Policies/Practices. Review all cash management policies and practices (which may be different). Listen to the podcast for a great example of ACH vs check payment pay cycle practices found at one company.
Review Payment Terms. Review the merged/acquired company’s payment terms and adherence to agreed payment terms.
Look for Best Practices: Look at your own company and their company and merge them. The other company could have better cash management practices.
Look for Shared Vendors – Your company may have the same vendors. Merge payment terms and communicate with the vendors. If their payment terms are changing, communicate early, and consider a grace period.
Get Training:
Beware of Cyber Fraud – Publicizing Alerts Cybercriminals Cybercriminals are scanning social media posts and when they find a company going through a merger or acquisition, they exploit the understandable state of unfamiliarity and chaos that can be present in both the AP and AR (Accounts Receivable) teams. Bendetti and I contributed to identifying some scams that have been reported that companies going through a merger or acquisition can be especially susceptible to since they are not familiar with the other companies vendors or customers:
Requesting AP Aging Report – The fraudster can then send a request to an unfamiliar Vendor Team to request a change in remit information and may have enough information to send a fake invoice.
Requesting an AR Aging Report – The Fraudster will then call your customer's unfamiliar AP department to change remittance information
FedEx Tracking Scam – The Fraudster impersonates the vendor and sends a text message for an order that was placed. You receive a text message showing a “tracking code” and asking to click and set delivery preference. The link is fraudulent.
Merger and Acquisition Scam - The pretext is that the victim’s company is preparing to close an acquisition deal with an Asian company. Sound familiar? The threat group purports to be the Asian company’s CEO and asks the target employee to work with “external legal counsel” to coordinate the payments necessary to close the acquisition. Then another player, the “legal counsel” gets involved to make it seem real. The threat group hunts out large, multinational organizations with a significant global presence, including many Fortune 500 or Global 2,000 companies. Read the full story here.
Listen to the Podcast
Bendetti and I discuss these three areas with commentary and examples. In addition, the podcast contains other tips related to employee morale, training, and exposure for career growth. Career growth is very relevant during a merger or acquisition, especially for those employees that are turning over the work, they need to move into their next position (or company). Employees that are absorbing the work need attention to since they need to handle the income work and have the skills to make a smooth transition of the processes.
Clean-Up Your Vendor Data.
Clean-Up Your Vendor Processes.
Pay the Right Vendor.
Other Resources
Vendor Process Training Center - Includes weekly training on vendor onboarding and maintenance processes such as Authentication so you know you are dealing with your vendor and not a fraudster, Validation of vendor data, and Management of vendor master files. Sign-up for a free account for access to FAQs, a Resource Library, Drop-In Q&A sessions, and more.
Need help cleaning up duplicate vendors or filling in the gaps in your vendor process? Work With M: Vendor Master File Clean-Up or Vendor Process ReDesign
Prevent Fraudulent Payments. Get Your Own Copy of the 3 Step Vendor Setup and Maintenance Process eGuide.
Want a handy Cheat Sheet that includes the links to vendor validation resources? Download the Vendor Validation Reference List and share it with your entire team!
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Debra R Richardson, MBA, APM, APPM, CPRS is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors, and Aramark.
Debra has experience with Global Vendor Maintenance activities and implemented a vendor self-registration portal for 140k+ global vendors across five Accounting Systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file. Reach out via email: debra@debrarrichardson.com.
Vendor Master File
Debra R Richardson
Stay happy, fraud, accounts payable, putting the ap in happy podcast, podcast, vendor setup, vendor master file, supplier setup, technology, authentication, supplier master file, Supplier Master File, rpa, acquisition, merger
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