Pitfalls of Accounts Payable Automation… Know the biggest time and resource waster in accounts payable? If you said “manually handling and processing the invoices“, you’d be 100% correct.
No wonder. There’s envelopes to be opened … invoice information to be entered … approvers to be chased down … invoices to be filed … and more.
Now, if I told you that 60% of the invoices the average accounts payable department receive are okay for payment without any other staff involvement, you might wonder why it’s all such a drain on resources.
The reason is that staff have to handle, check and process every single invoice as if it needs some interaction – because they don’t know which of the invoices will fall into the “good pile” – that 60% that don’t require special handling.
If you want to make your accounts payable department much more productive, you’ll need an efficient and effective invoice processing solution . One that avoids the pitfalls of accounts payable automation. A good one will:
- Capture the invoice
- Extract the necessary information from the invoice accurately
- Check that key details are present and accurate – a valid ABN number, an invoice number, correct tax calculations, etc.
- Compare the captured information with your financial data – your master supplier list, your open purchase orders, good or services received, etc.
- And apply the same business rules you would apply when you are looking at an invoice.
A good processing solution will allow you to concentrate on only the 40% of invoices that actually need attention. Which means that you increase your department’s productivity by 60%.
But to achieve a gain in productivity as dramatic as this, your automation solution must include the ability to apply your business rules. Otherwise, you’ll only be saving typing and filing time. And make sure that the system reflects your business rules, not just the rules that the system vendor has built into their system already.
Also, make sure that the system you adopt allows you to change those business rules easily and inexpensively. You work in a constantly changing environment so you need to be able to update your business rules to allow for constant improvement.
Bottom line: Invoice processing is a big part of what accounts payable do. But it doesn’t have to be the biggest drain on time and resources.