An accounts payable process is fundamental to almost any business, large or small. Its how we pay what we owe to our suppliers for the goods, or services they have provided us. Because it involves money – it must be treated very carefully.
It is typically a multi-step process, that can often involve more than one person for a single invoice. The effectiveness of this process can significantly impact your business in ways that are either good or bad.
So why is a typical Accounts Payable process expensive anyway?
The problem with traditional accounts payable is that it involves documents and information that you don’t have any control over. That is: Your supplier’s invoices.
- You don’t have control over when you receive them
- You don’t have control over how they arrive ( in the mail, via email, with the goods, or some other way)
- You don’t have control over the format that they are sent to you in
- You don’t have control over the content of them
But your supplier’s desperately wants them paid! We call this an “uncontrolled” situation .
“Although we receive around 80% of our invoices by Email now, there are still a number of suppliers who print and mail them to us, and we don’t see that changing soon.”
So what this means is that you have to process each document manually, and people need to make determinations about the information they have been provided. In many cases, they have to locate information that you haven’t been provided. These simple tasks can take inordinate amounts of time.
- Finding matching Purchase Orders
- Checking values
- Matching quantities
- Handling under or over supply
- Confirming goods or services have actually been provided
- Reviewing high value invoices
- Reviewing low value invoices
- Reconciling payments
So how do we start to manage all of this chaos?
Thankfully, there is an easy way! And it comes down to 3 simple steps:
- Control the Uncontrolled
- Reduce or eliminate Manual Processes & Data Entry
- Connect With Your Systems
By funneling all possible incoming sources into the one “pipeline”, we can standardise the format and process that all invoices go through.
Reduce or Eliminate Manual Process and Data Entry
By configuring powerful automated workflows, we can digitally represent “your” business process, so that decisions get made according to your business rules, and routing occurs automatically. For example, sending high value invoices to senior managers for approval. or automatically highlighting invoices that don’t match the original purchase order as exceptions. This not only cuts out the manual handling and legacy modes of distribution (such as printing the invoice on paper to be signed, or forwarding emails with the invoice attached), but it also occurs immediately, speeding up the overall time to distribute.
Having an automated system would be almost pointless without a well integrated solution. Avoid yet another “silo” of information. Instead, enjoy the power of a central information hub where not only what you are searching for can be found, but related information and documents easily presented to enable you to make well informed decisions.
By the time you consider all of the soft and hard costs relating to the life of a supplier invoice in your business, you may be truly paying anywhere between $5 to $45 per invoice!
Purely reducing data entry times and achieving automation rates of 90+% will return immediate labour savings, allowing you to use your staff on more valuable tasks.
With a digital system, you now have instant business visibility throughout your accounts payable department, and your responsiveness to enquiries is as simple as an internet search.
Watch this video to see some of the benefits.