By Chris Doxey, Source-to-Pay Consultant at Doxey, Inc.
The “touchless” Accounts Payable (AP) process utilizes a combination of Purchase-to-Pay (P2P) automation and Accounts Payable best practices. Below are six process areas where you can start automating:
Automated PO Requisition Process:
Upon approval, POs can be electronically invoiced from suppliers directly for a paperless process. Automated matching occurs between the PO and the invoice when it arrives to validate price, quantity, line amount and items ordered. All invoices matched can be tracked against the PO until the PO is closed to account for blanket POs or partial payment against an open PO.
eInvoicing is the exchange of the invoice document between a supplier and a buyer in an integrated and agreed upon digital format eliminating paper completely and reducing cost. Imagine no more paper invoices!
Automated Approval Process
: This is where the invoice approval process is linked to your company’s Delegation of Authority (DoA) policy. The process is completely automated based on defined rules via workflow. The workflow determines if an invoice needs approval; who the appropriate approvers are; and in what order approvers should approve payment of the invoice. The workflow then sequentially asks each approver in the approval list to approve invoices online. For example, you can define a rule so invoices over a certain amount require CFO approval and then CEO approval.
Most leading practice companies link the DoA policy to the job levels within the employee master file. A DoA table is then established as the driver of the approval workflow. If an approver moves to a different position or department, or leaves the company, the approval tables are automatically updated.
Automated ACH Remittance:
As companies increase their electronic payments to suppliers, many are moving towards sending the automated remittance advice as confirmation indicating that the invoice has been paid. This best practice helps reduce paper and moves closer to a “touchless” process.
As supplier portals move beyond invoice status tools, many solutions are now delivered as a shared buyer service which accommodates eInvoicing and provides many additional benefits. Supplier portals provide:
Accounts Payable Self-Assessment Process
- Reduction in paper invoices as suppliers send their invoices electronically.
- Faster transactions with integration to ERP software.
- Stronger supplier relationships with a well-defined onboarding process and real-time invoice status.
- Digital signatures to guarantee authenticity and security.
- Flip POs for easy invoicing.
- The ability to correct errors on the spot to prevent payment delays further down the line.
- The ability to begin using sales catalogs for greater accuracy.
: One of the goals of an Accounts Payable department is to pay a supplier “once and only once.” Rather than have a third party or external audit firm identify a control weakness; many companies have worked with a solution provider to implement a self-assessment process that identifies a possible duplicate payment before the payment is initiated. This software considers “fuzzy” logic algorithms that flag a potential duplicate or erroneous payment. This self-assessment process can often be included in a company’s internal control program.
A savvy AP leader should have the strategy in place to move to a paperless environment. It all starts with implementing some best practices including electronic payments, the automated ACH remittance and the automated workflow process. Best practices establish the foundation for AP automation
and can lead to the achievement of your “touchless” process. The success of your new “touchless” process can be measured not only by improvements in metrics, but by the results and impact of your automated self-assessment process. Lastly, dynamic discounting can be a “win-win” option for both buyers and suppliers.
To learn more, watch our on-demand webinar: How to Achieve a Zero Touch Accounts Payable Process