saving with AP AutomationSo you’re beginning to think that automating your accounts payable department just might make sense. Now the question is how to do it. It does sound like a daunting task. But if you take it one step at the time it’s much less so.

Get started in automating accounts payable: Step One: Draw it

The first step is to create a flow diagram of how invoices travel through your organization, or at least how you think they travel – it’s amazing how many work arounds can be invented by staff to make their life easier. Concentrate on the path that most invoices take – not the three percent that need to go through some weird and wonderful route.

Remember, if you can improve the process by only twenty percent it’s well worth the effort. Don’t let the odd three percent stop you from gaining twenty.

Next, armed with your diagram, try to place approximate percentages on the number of invoices that go these various paths.

Then get some experienced and trusted member of staff to check your diagram. Getting this done now can save time later and also starts to get that all important “buy in” early. It also might spot some of those work arounds. Having a clear and accurate idea of what is going on can only help. You don’t need to mention automation at this stage, all companies should be reviewing processes regularly anyway.

What if?

Now, stop for a moment and consider the question: What if there were some device … some software … some “something” that could review every single invoice and use criteria you set to send each one to the person it should go to?

It’s a matter of time

Then ask yourself this:  How many would need to go to accounts payable? And follow that one up with: If only those invoices that should go to accounts payable went to accounts payable … how much time would be saved?

A few more questions

Whilst we’re at it, let’s get in a few more:

How much time do your AP staff spend opening envelopes, filing, copying, retrieving and simply shuffling paper? How much time do they spend typing in invoice details? How much time answering questions from suppliers chasing payment due to invoices unapproved and sat on someone’s desk? And how much time chasing people for approvals?

Of course, you probably won’t be able to come up with precise numbers. No worries.  A good guestimate will be close enough.

Enough essay questions. Now, here’s the math part.

A quick calculation

Take the number of hour’s staff spend processing invoices currently and subtract all the time now spent typing, filing and distributing the invoices.

The resulting time-saved figure is the basis for your business case. You’ve got some hard data to sway management.

And you’re no longer at the mercy of vendors. You’re armed with your flow chart and your business case. You know what you can expect from automation.

Time to invite the vendors in

The vendors should be able to tell you if their systems will deliver the benefits you need. But don’t stop there. Ask them for a guarantee.

Of course, no vendor will be able to guarantee specific dollar savings … that’s beyond his or her control. But he or she should be able to guarantee that you will see significant benefits or give your money back.

After all, we get to test drive cars before we buy them. Why not try out a business solution? You’re taking a significant risk in committing your organisation’s resources to make the change, right?

If the vendor believes in his or her company’s solution, a guarantee shouldn’t be an issue. If it is, find another vendor.

About that “something” I mentioned …

The “something” that would review every single invoice and make sure it’s sent to the right person. It actually exists and is called a “business rules engine”.

When you talk to vendors make sure to find out how easy and how hard it will be to change the business rules with their “engine.”

The reason for this is that once you start automating accounts payable you’ll quickly see better ways to improve the workflow and management of invoices. You need to be able to make this change easily and without a lot of expense.

You’ll also see something else. Increased productivity.

All because you took the time to look into automating accounts payable.