Accounts Payable teams are at the sharp end: They can feel the wrath of suppliers, the frustration of colleagues and pressure from the C-suite to deliver greater value. But fortunes can change dramatically for everyone if AP can win three vital battles.
In a previous blog, 'Why AP keeps losing at rock-paper-scissors
', we explored the seemingly-intractable problems experienced by AP departments world-wide.
In many organisations, invoice processing is a paper-intensive, 'high-touch' manual activity that drains resources and drives up costs. Inevitable human errors, delayed payments, supplier angst and a lack of visibility into cash requirements can create problems in every direction.
But the bigger picture is perhaps more worrying. Traditional processes used by AP departments can become a choke point for the day-to-day functioning of a business as tries to buy the goods and service its people needs. What's more, paper-intensive activities and the problems they create can become a barrier to broader finance, purchasing and supply chain transformation programmes.
As we hinted at last time, there is a way to cut through. It's possible to turn AP into a highly-automated, lower-cost activity that streamlines processing of all invoices from receipt to payment. At the same time, new tools underpinned by best practice can help to enhance supplier relationships and drive up policy compliance throughout the Purchase-to-Pay (P2P) cycle
But for this to happen, AP needs to win three battles:
Battle #1: Capturing 100% of invoices in an electronic format
With the right solutions, AP teams can confront the tricky issue of how to turn a wide range of paper, PDF, cXML, CSV and other invoices into accurate, system-ready data - with minimal cost and effort. Here, a range of automation techniques can make the difference by harvesting, validating and enriching the data in seconds.
Over time, it's possible to transition every kind of supplier, from hi-tech global companies to low-tech SMEs. Virtually all manual keying from paper invoices is eliminated - so too are the human errors that inevitably creep in. Suddenly you've overcome a massive obstacle. But now there's another in your path ...
Battle #2: Automating invoice matching & authorisation
Your success so far will simply move a major problem further down the line, unless you can win this next battle. But as thousands of electronic invoices queue for approval, automation can prove a game-changing weapon yet again.
With the right solutions, it's possible for matching, coding and discrepancy resolution to happen automatically. PO invoices are matched to the purchase order and receipt and go straight through to approval with little or no manual intervention. Invoice validation at data capture stage helps first time matching by rectifying errors such as duplicate invoice number or incorrect PO prior to entering invoice matching. Meanwhile, any non-PO invoices are channelled swiftly into an authorisation workflow. Payments can happen on time, early-payment discounts can be claimed and the organisation can get full visibility of its upcoming cash needs.
Battle #3: Simplifying supplier communications
So many procurement and finance initiatives fail the "what's in it for me" test among suppliers or prove too complicated for their widespread engagement. But a cloud-based supplier communications network can create a collaborative approach that will support every manoeuvre you make.
You'll win over suppliers if you can give them self-service tools, allow them to send invoices in seconds, provide complete visibility of the invoice approval/payment process. You'll become easier to do business with and able to win greater commitment from suppliers as a result.
What victory looks like
Ultimately, AP automation solutions lead to a clear, rapid and sustained return on investment. You can expect significantly reduced costs and an improved bottom line.
Tackling these long-standing AP issues can remove a massive burden from your AP team, reduce document storage requirements, virtually eradicate errors and reduce the overall cost of doing business with all your suppliers. Then AP will be seen as a department whose value-added activities propel everyone forward.
Take a 15 minute health check of your Accounts Payable capabilities
— and get valuable insights into what battle you need to win next. Alternatively, take a look at how you could transform your AP performance