Keep AccountsPayableCosts for Decision Making CaseOffshoring
DecisionQuantitative Costs:Accounts Payable FunctionAnnual
Savings:Function Performance by current employeesLess: Cost by
Accounts Payable ManagerOther Department Costs$$Checks
ProcessedBank Reconcilation Function$Bank ReconciliationsRetain
Accounts Payable ManagerSalaryAllocated BenefitsActual
BenefitsOther Costs (Compuer, Travel)$$Allocation of Manager
ExpensesIT Department Connectivity UpgradeIT Personnel Batch
Processing Costs1,250.00 per month0.65 per transaction
processed600,000 per year1,250.00 per month200 per bank
reconciliation600 per
year75,00018,75019,48815,500109,988$587,500.00(71,012.50)46,000.00Outsourced
ProcessingConnectivity UpgradeIT Personnel Batch
Processing562,487.50Annual Accounts Payable
Savings$1,687,462.50$1,687,462.50Three year Accounts Payable
Savings65% Accounts Payable35% Bank Reconciliation100,000.00 one
time charge2,500.00 per month2,500.00 per monthTable 3: Budgeted
CostsSalariesBenefits loadRent and relatedSuppliesPCsIT
SupportPostageTravel and EntertainmentCorporate
expensesTotalAccounts PayableBank Reconciliations$470,000
$215,000117,50053,75064,00042,00016,7501,75012,0006,00011,5006,000270,00011,5003,0008,0003,000$981,250
$330,500Qualitative (Nonfinancial) Costs:Not all of the services
are performed – only some IT, some customer service and some
accountingDelphi Outso …