Your guide to best practices and expert recommendations for automating your accounts payable process
Clearly define your goals
Are you looking to downsize, upscale or simply reduce unnecessary administrative work? Or is your focus on optimising cashflow, enabling data-driven decision making or increasing business agility?
There are many benefits of automating accounts payable, so clearly defining your pain points, end goals and success metrics will help sell the project internally as well as align stakeholders and teams to meet those goals.
Don’t just focus on savings AP Automation is not just about realising savings for the organisation. Improving visibility of company spend, reallocating employees to high-value tasks, and staff satisfaction levels are some examples of what automating your pur- chase-to-pay process can add to your business. With so many possible objectives, it may be hard to narrow down exactly what you want and how to prioritise. We have broken it down for you insome different areas.
Automation What repetitive and time-consuming tasks within your team can be automated today? With today’s technology advancements, there is almost no limit to what tasks can be automated. Defining your end goals and bottlenecks that stand in your way is a neces- sary first step towards achieving them.
Lowering costs Trimming away unnecessary manual tasks in the receipt and processing of invoices will result in more invoices processed per FTE, resulting in reduced administrative costs. Increasing FTE productivity By increasing your first-time match rate, reducing errors and streamlining exceptions handling, you will free up time for your teams to spend on what they should be doing – driving value and savings for your organisation. If done right, automating and streamlining the matching and approval process also reduces the number of supplier queries and calls. Improving staff satisfaction All in all, automating repetitive and tedious tasks will reduce stress and improve satisfaction within your work force.
Control Where are you lacking control or visibility today? Turning your operations truly digital incre- ases both the availability and accuracy of data, opening doors to countless opportunities. Better spend control Having access to complete and trustworthy data in real time will give you a whole new level of visibility over your spend. Ensuring purchase order compliance, detecting maverick buying and being able to get an instant forecast of your cash flow situation is just the beginning. Having the foundation for analysing your spend and buying behaviour in real time – that is the true power of data. Error prevention Regardless of whether they are made by you or your supplier, or caused by human mistakes or inaccurate data, everyone wants to prevent errors. By turning your processes digital, you gain tools to help avoid errors, such as the ability to automatically validate and correct data at different stages of the document life cycle. Increasing quality and completeness of invoice data will increase the rate of straight-through processing. Improved payment performance Automation takes time out of the equation of invoice processing so your organisation can ensure on-time payments. Apart from preventing late payment fees and seizing early payment discounts, you also get greater flexibility in managing company cash flow. Enhanced data quality Increasing quality control before data enter your systems will result in more accurate vendor master data, benefiting both finance and purchasing operations.
Resilience In today’s new normal, organisations are increasing efforts to protect operations from disruptive and external events. WFH proof your organisation Digitalising operations and removing the need to access post boxes, printers and scanners allows your operations to function during times of remote working or limited access. Enable growth The digital transformation of business processes increases the agility and scalability of your operations. Security
How sensitive is your data? Many organisations have sensitive data on purchase orders and invoices. Exchanging documents and informa- tion through secure and encrypted communication channels will protect personal data and reduce the risk of non-authorised access.
Is your purchase-to-pay process contributing to your sustainability goals? Reducing the need for paper and shipping has an obvious posi- tive impact on your company’s CO2 footprint. Beyond that, streamlining and automating communication with your suppliers will also enhance your relationship and collaborative expe- rience.
Make sure you choose KPIs and metrics that give a clear view of progress towards your business goals and objectives. Organisations often struggle to quantify savings and value brought to the organisation as a result of the project. Here are a few suggestions:
The do’s of process automation
The implementation of invoice approval software is only step one towards AP Automation. The way you adapt connected processes and your day-to-day communication with suppliers about new business rules will have a great impact on the outcome of your project. Here are some recommendations to get you started: Analyse your current exceptions and errors Understanding where and why your invoices end up being manually handled by your teams is a crucial first step to preventing it. Consider x-way match In addition to matching invoices against purchase orders and goods receipt, is there a fourth layer of acceptance that would bring additional granularity to your approval process? For instance, organisations are increasingly adding proof of acceptance to the matching process to ensure that the quality of goods meets expectations before authorising payments. Clearly define your “perfect invoice” requirements Define which data requirements an invoice needs in order to fulfil your business rules and qualify for auto-approval. These requirements may vary between different countries, suppliers or invoice types. Inform suppliers of how to fulfil those requirements Work with your purchasing operations and service provider on how to best make suppliers aware of your requirements. Align your purchasing operations to help suppliers meet requirements Make sure suppliers have access to all the mandatory data to create the “perfect invoice.” Build an outer validation layer Reduce unnecessary and time-consuming errors in your systems by creating an outer vali- dation layer that lets your suppliers correct their information before submitting the invoice. Automate error handling Automate the rejection of the most reoccurring types of errors by providing suppliers with the data, tools and knowledge to prevent them.