The process of accounts payable automation with CAAPS is far simpler than you would expect. To help demonstrate, let’s look at how a traditional AP process compares to an automated process.
The traditional accounts payable process
Invoices are received by account payable. Our annual Accounts Payable Benchmark Report measures the productivity of AP operations. It shows that AP personnel will review each invoice and find on average 60% of the invoices are fine to be processed, and 40% need to be followed up. In doing so, accounts payable has wasted a significant amount of productivity simply reviewing invoices.
Those I nvoices which require further attention can be divided into three categories:
- The goods need receipting.
- The invoice needs coding and approval.
- The invoice exceeds the purchase order so it must be sent to purchasing.
Our research has found that, on average, 40% of invoices fall into one of these three exception categories and require accounts payable involvement.
This is where automated accounts payable proves its value. It sorts and streamlines these manual tasks, allowing staff to focus on more productive duties.
How the automated accounts payable process works
- Reviews each invoice and applies the agreed business rules to sort the invoices.
- The invoices are then routed to the appropriate person or to the ERP solution, if the invoices pass all internal controls.
- Accounts payable attends to approximately 8% of invoices rather than all. This is due to the fact many of the 40% of exceptions need to be fixed by other staff. Previously AP acted as the post office and task master to chase and make sure the actions were taken. Now AP only looks at exceptions meant for them. Typically 8%.
- CAAPS follows up each recipient to ensure they do their assigned task. It also checks that each task is completed correctly.
The added benefits of an AP automated process
AP automation delivers a comprehensive report that clearly outlines each and every step of the process and the flagged problems. Importantly, it ranks the most common problems and what or who is the cause.
This provides management with a solid foundation for driving change and addressing the problems. It is far easier to implement a solution when the data supports it.
The reporting drives organisational change by creating the ideal procure-to-pay environment whereby procurement and payment is very efficient.
To find out more about the benefits of accounts payable automation with CAAPS and the features offered by CAAPS contact us today.