Has your business implemented an accounts payable automation solution that doesn’t seem to be keeping up with the changes that are occurring in your business?
Maybe some original staff members have moved on and taken valuable IP with them. Or your internal AP process has changed over that time. Or better still, business has boomed and the volumes of invoices, and with them exceptions to deal with, have grown substantially creating more stress on your already overworked finance team. But what are your options?
Well before you decide to throw the baby out with the bathwater, and consider a completely new solution to automate your current invoice processing demands, lets look at some options to optimize your existing solution. These will reduce investment and minimize any drain on your internal IT resources.
Purchase order creation solution.
Looking at your entire process from a different starting point may just be the answer. Rather than looking at the traditional (hyper link to original blog) approach which focuses on capture-workflow-integration. Lets instead look at implementing a P.O generation process. But why?
As reported by Aberdeen Group in their market research on this topic, processing an invoice (and an invoice exception falls into this bracket) costs a business $11 per invoice. Focusing on a solution that reduces or eliminates these exceptions completely can significantly reduce these increased costs and stresses on your team.
Most AP automation solutions are built on a business process management (BPM) platform. So by that fact you already have the technology platform required to build your solution. Implementing a new process within your business targeting all purchasing is an easy change to implement.
Using your BPM platform, a request to purchase any product and/or service can be triggered by a simple form which can be hosted as a hyperlink across any of your exiting systems. A team member fills in their purchase requisition digital form. This triggers an approval workflow within your BPM platform and routes this P.O. requisition to the relevant manager for approval sign off.
Benefits of this new process
The benefits to this new approach are many. Firstly when an invoice comes into your business and is automatically captured by your OCR capture engine, your older existing AP automation solution is now only required to capture the P.O number off the invoice, and match this and the total amounts against the P.O that has been generated in your system. This significantly decreases the number of exceptions your team are required to deal with at $11 per invoice.
Secondly if you are thorough in your P.O. requisition process and add in the correct GL coding information etc, more accurate data can be applied to each invoice as it is approved through your existing solution, significantly improving its effectiveness for your business.
New businesses adopting AP Automation technology
While this article has focused on businesses with existing AP automation legacy solutions and optimizing these for greater output. The same rationale can be applied to businesses who are setting out on their journey to find the right accounts payable automation solution for their business.
If you take some time to look at the correct approach from the start, you may in fact significantly reduce your upfront investment costs. Why?
Well most current AP solutions will boast of features such as ‘99% capture accuracy guaranteed’. In a lot of cases this is an additional cost to you per invoice, as they have a BPO team off-shore and a human eye is verifying all information.
By focusing on capturing and matching only a P.O value off the invoice you can all but eliminate this additional cost.
Secondly, if your business can stringently apply this new P.O. generation into your business processes, whereby no invoices get paid without an applicable purchase order. You can now eliminate the requirement any for business rule approval workflow to be scoped into this new accounts payable solution project at the initial set up phase.
And in doing so significantly reduce your initial professional service or implementation costs.
For further insights on Invoice processing solutions, and how these could be applied to improve your business, feel free to contact Bryan Murphy (email@example.com)