San Francisco-based AMB Property Corp. owns, operates and develops logistics and distribution facilities in major metropolitan markets around the world. As the company's portfolio grew and became more complex, its manual accounts payable system, which processed more than 100,000 invoices per year, was quickly becoming obsolete. The process required multiple levels of approval, consumed excessive amounts of time, and incurred costs associated with mailing, copying and storing invoices.
AMB also reexamined its tenant rent payment and application system, which processed more than 31,000 tenant payments annually. Each month, six accounting specialists processed 2,600 tenant checks and 80 ACH payments across more than 200 lockboxes with annual bank fees exceeding $500,000.
AMB adopted electronic, automated invoice and payment processing systems. This step converted AMB's paper invoices into electronic images and sent them through an automated online approval workflow, eliminating paper copies. On the tenant payments side, AMB's newly automated rent payment processing system expedited bank deposits and provided better cash flow control.
With the new accounts payable system, invoice cycle time reduced from 25 days to approximately three days. The largely paperless process also supports the company's sustainability initiatives.
"We don't have to sift through file drawers for invoices, and our audit process now takes less time," said Debbie Doble, AMB's manager of accounts payable/accounts receivable.
Checks scanned into the system as images are easily retrieved, and transactions are automatically deposited into the appropriate operating accounts on the same day. Additionally, the 200 lockboxes were consolidated into two regional locations, reducing the company's annual bank fees by almost 60%.
AMB represents a compelling demonstration of tangible results available from electronic processing and automation. In a challenging economic environment, such technologies can deliver the benefits of new efficiencies along with increased cash control and decreased operating costs.
Joel Nelson is a senior real estate analyst at Yardi Systems, Santa Barbara, Ca. Tags: