Businesses face growing payment challenges as rising supplier expectations for faster payments further complicate remote work scenarios in the wake of the pandemic. These challenges are not new to Mike Ferretti, CEO of Great Harvest Bread Company. Since joining the company more than two decades ago, Ferretti has split his time between corporate headquarters and his primary residence thousands of miles away. This split, combined with the remoteness of headquarters itself, has made accounts payable (AP) automation essential at Great Harvest since the mid-2000s.
“The office is in a small town in southwest Montana, where our accounting team is located and where the bills are paid,” Ferretti told PYMNTS in a recent interview. “Our CFO lives 100 miles away and I live 2,000 miles away. I think we’ve been a bit ahead of the curve in terms of automating everything we can because we have a long distance company.”
A long way to go to achieve automation
Ferretti said that when he started as CEO in 2001, working remotely meant most things were done by fax, phone or email. Modern technologies such as smartphones and video conferencing have made things easier, but they have not eliminated the need to handle certain tasks face-to-face.
He said he doesn’t think technology will ever fully replace the physical workplace when it comes to developing and driving company culture. When he joined Great Harvest, however, his physical visits to company headquarters involved more than just spending time with employees.
“Before automation, when I came into the office, there was a stack of documents I had to sign that were literally a foot high sometimes,” Ferretti said.
Although his visits were far from infrequent and most expenses could be paid without his signature, the checks he had to sign – and the approvals he had to make in person – quickly mounted when he was not. not in the office. It would take at least half a day just to catch up.
“Now I can just see it online, and our CFO sends me notices,” Ferretti said. “I probably haven’t had stacks of checks since the mid-2000s.”
Time savings and supplier satisfaction
Feretti said the automation has made office life easier and saved countless hours of hotspot work, not just for himself, but for the entire team. It also helps ensure that the team knows where the money is going and what bills are due.
“It’s just easier to verify and audit,” he said. “We think it’s just a lot easier to track what’s happening electronically than if you involve mail or paper.”
The budget his management team creates each year identifies known spending and serves as a pre-approval for spending, Ferretti said. Any budget item can be paid automatically through the system without requiring human intervention.
Exceptions (items that are over the budgeted amount or not included in the budget) show up as alerts for him to review.
“Instead of having to review a gazillion checks, I review six or seven exception items each month, and we’re good to go,” Ferretti said. “It’s just extra hours to my life.”
The system also allows suppliers to get paid faster. The Automated Clearing House (ACH) and electronic funds transfers further expedite the company’s automated payment processing, ensuring vendors aren’t waiting for paper checks in the mail.
Automation all the way
Great Harvest has 178 retail outlets generating about $110 million in sales annually, Ferretti said.
Of these, 177 are operated under franchise. To help franchisees simplify and manage their own vendor relationships, Great Harvest is working with a company that provides retail-level automation. The program uses a photo of an invoice taken with a mobile device to populate a cloud-based reconciliation program to track inventory and costs.
“I can push a button and get a 24-hour, real-time [product and loss statement] in any bakery in the country right now,” he said.
The program also has a bill payment module and can integrate with programs such as QuickBooks. So franchisees can have a completely electronic process, from tracking invoices and inventory to paying vendors.
Ferretti said the two things that constantly impress him about automation are how much it simplifies processes and how much room there is always for improvement. He said he would have expected that at some point the possibilities for automating or simplifying processes would decrease, but each time he thinks there is nothing else to do. , something new arises.