ipayables

Automate and Leave the Heavy Lifting Behind

By iPayables | June 4, 2020

How did we ever get along without computers or the ability to automate? Computers contribute to the operation of just about everything now. From cars to elevators to restaurant menus to medical equipment, computers have a hand in just about everything we do and touch every day. 

The same is true for the business world. Every office, it seems, has a terminal connected to a mainframe server. Even the mailroom. 

Yet some departments are slow in catching up to the computer revolution. One glaring example is accounts payable. In a lot of ways, AP departments at so many companies remain stuck in the 1970’s. This includes any AP department that still deals with paper invoices. 

Think about how paper invoices get processed. The supplier writes up the invoice and mails it. A few days later, it arrives in your mailroom. Mail handlers open it and route it to (hopefully) the accounts payable department to log it in. But if the invoice is vague on where it should go, it may end up in the department where the purchase order originated. Now it has to be rerouted. A day later, accounts payable finally receives it. Now, someone has to manually log in the information. Hopefully, the data is logged in correctly.  

Next, the paper invoice gets delivered to the acquiring manager for approval. The invoice may sit on that manager’s desk for days, even weeks. The manager might misplace it. Once found, the invoice may still have to be matched with a paper P.O. 

While all this is going on, the clock is ticking. The supplier that sent the invoice is waiting, and if it’s getting late, they’re probably calling, looking for a status. Your AP personnel field these calls then go searching for the approved invoice. What if the approving manager is on vacation for the next two weeks? When the invoice eventually does come back, a check must be issued and sent down to the mailroom for processing and sending out with the rest of the mail. 

If this sounds like a lot of work, that’s because it is. The only thing that awesome machine on everyone’s desk did is serve as a place to punch in the data. In the paper invoicing process, there’s almost no reason to use the computer. 

If the same company had high-level accounts payable automation, here’s what happens: The supplier sends its invoice electronically (electronic invoice). That invoice already contains all the data needed for sorting, matching and payment—you automate and the computer does the job. The invoice is ready to be seen by the acquiring manager from anywhere on any designated computer screen. A few clicks and the P.O. is matched. Another click and the invoice is approved and sent back to accounts payable instantly. AP personnel can now make payment electronically to the supplier. What’s more, the supplier can follow this whole process in real time through a free supplier portal.

Additionally, when you automate, late fees turn into early pay discounts and happy suppliers want to work with your company based on the most favorable of terms. The stress of chasing after paper and getting payments out the door on time all goes away. This is what your computer should be doing for you.

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