7 Reasons Accounting Managers Love Automated Invoice Processing

Before

You are responsible for AP, AR, capital accounting, general accounting, bank reporting and many other routine tasks. The vast majority of your time is spent focused on AP, either directly or indirectly.

With AP consisting of paper and filing cabinets, it’s difficult to have the information you need to perform these tasks accurately. Invoice processing times are lengthy and you have no visibility into amounts until they are posted to the GL.

Each invoice that is matched to a PO or goods receipt still needs to be touched at least 4 times and filed in 2 different places before it is posted to the GL. The invoice is touched and filed yet again when payment is made.

When exceptions come along, there’s no limit to the time it could take to get the exception resolved and posted. If there is an issue that brings process problems to light you investigate and adjust the current business process in order to avoid the same issue again in the future. This means there are “patches upon patches”, because users and vendors keep finding ways to avoid policy, either accidentally – or on purpose!

Sometimes the result of an issue is very unexpected. You might discover that one vendor is using you to suit their cash flow needs by delivering goods that you didn’t need or use, or simply because you don’t use POs for that vendor – you’re just paying for anything that they deliver.

As the AP Manager, you are the person that has to deal with “fire drills” when a vendor puts your company on credit hold. You stop what you are working on, gather the facts of the situation, find out exactly where the paper invoice in question is, and communicate where the failure was with both the vendor and the department/location that was impacted by the credit hold.

One problem with these situations is that you don’t have any insight on how long an invoice was out for approvals before it came back to AP for entry and payment. Because of this, it often looks like AP was the bottleneck that caused the credit hold.

If a vendor knows your process isn’t perfect, they can take advantage of that  — and put you on credit holds earlier than if they had confidence in what you were doing.

Month end close is just a fact of life that needs to be endured. You can only put so many manual tasks in place and still have confidence that you have accommodated all possible scenarios, just to learn that you haven’t. Often the data that is collected is a series of inconsistent reports and spreadsheets.

This leaves you to perform a lot of behind -the-scenes analysis before releasing the data up the food chain to the controllers and the CFO. If you had data that was the ‘single version of the truth’ you could eliminate much of the manual oversight that only you are qualified to perform.

After

1. You have visibility and self-service reporting from all of the plants. You are no longer dependent on spreadsheets.
2. You’re not searching through file cabinets.
3. AP staff gain time from not having to file, un-file and re-file at each step.
4. You gain the confidence of management and your vendors. Month end activities and report gathering is coming from a place where all of the data is accurate and exportable. The process has removed non value added manual tasks.
5. You have visibility into both the transaction status and history, so that if a credit hold situation occurs you immediately have access to the problem.
6. You have metrics available to watch the productivity of your AP staff. This allows you to have confidence in your team and to address areas of improvement when you see the need.
7. You are no longer the person that has to do other tasks that fall into the gap called ‘someone has to figure it out’ before the information can be used.

This series is excerpted from our Whitepaper on the Benefits of Purchase to Pay.