I have noticed that most Accounts Payable groups like to start the year off with ideas and strategies that will help them in the coming year. Each of these departments are in different companies with differing sets of circumstances that makes it impossible for there to be a “magic bullet” for solving everyone’s problems. Whether you are a Fortune 500 Company operating with Purchase Orders or Non-POs, or if you have just installed a new ERP system, chances are there is something that makes your payables department unique. Also you may still be processing invoices manually with a portion of invoices processed through electronic invoicing. Maybe it’s time to evaluate your processes and improve your procedures. Here are a few ways to help jump-start your AP Department in 2015. First, figure out what your “current state” is:
- Where do You Stand? – Electronic Invoicing vs. Paper Invoicing – Taking a full evaluation of your AP Department and looking at how you are processing invoices is paramount to having a profitable AP Department. First look at what percentage of invoices are electronic. I mean fully automated, not a solution that’s really a scanning solution and claims to be E-invoicing. A solution should offer AP Automation that includes web-based data entry application as well as free vendor adoption and supplier support. Invoices are coming in electronically, coded, approved and ready to be paid by clicking a button or being 3 way matched before going into your ERP System. In other words, EDI or a Full AP Automation solution means no touch electronic. What Percentage of invoices are paper and do you have a plan to become completely paperless? Is AP Automation on your radar for 2015 or is it just a pipe dream? What steps are you taking today to make it a reality? Are you satisfied with the manual processes that you are currently engaged in?
- Where are the Biggest Benefits? – There are 4 major benefits that can be attained through AP Automation. Some of these may be more important to you than others. Those benefits include efficiency, visibility, discounts and error reduction. Once you start using E-invoicing/AP Automation (the right way) you can expect accurate data that will help your AP Department to become more efficient from day one. With complete and clear visibility you will be able to navigate through the system integrating E-invoicing and workflow with an ERP system. Early pay or dynamic discounting is also available with Electronic Invoicing allowing discounts to be captured and processed each month. These benefits distinguish those fully AP Automated Solutions that will help you with your ROI versus a solution like scanning and imaging which have less value to your organization.
- What to do About It? When you have the answers to these questions, now you can start the process of figuring out how much effort it would take to fix these issues.This really is key to being able to justify the cost and have an attainable ROI for your project. Many times people will focus on only one issue, and to solve this issue it will cost X amount of dollars to fix it. Then they work on figuring out the ROI for X amount of dollars and it just doesn’t always add up. If they were to look at the broader issues, then they may be able to get the ROI necessary for executive buy in. With an AP Automation solution, it’s more than just tackling one benefit. It’s looking at it with a broader scope, incorporating Dynamic Discounting, AP Workflow, E-invoicing and getting the ROI necessary.