Accounts Payable (AP) is the finance process most often prioritised for performance improvement.
For a lot of organisations though the paper invoice approvals process has not changed for many years with the supplier invoice (either paper or electronic) eventually finding its way to the accounts department who register and receipt it.
The invoice is then sent to the relevant approvers if not approved already but in larger organisations there can be many tiers of approval and with several people needed to authorise the invoice across multiple locations.
Frequent process issues happen such as:
- Lost invoices
- Endless re-routing
- Lack of priority from the authoriser
- Authoriser sick or on holiday
- Not knowing who is responsible for the purchase and who should then check and authorise
This leads to major delays and mounting frustration for the accounts department and suppliers. Often, great manual effort can be found in the converting and entering of invoice details into the book of record, such as the ERP system, and resolving exceptions and errors, resulting in wasted time, effort and money.
A recent survey by Kofax found that there were 3 key areas for improvement in Accounts Payable:
- Faster Invoice Processing – 40% said that invoice processing was their top area for improvement
- Improved Workflow – 47% of AP users would like to improve their workflow
- Increased Process Visibility – 40% of AP users would like to increase process visibility
Streamlining the AP process clearly has many benefits. Having invoices in a digital format for example allows them to be coded and approved without the need for a paper trail which increases efficiency, and automatic email reminders can replace the need to chase up approvals.
With the right solution AP can:
- Can improve productivity (capture, coding and validation metrics)
- Reduce bottlenecks (identify areas needing resolution)
- Improve cash management and supplier performance (through spend analytics and supplier score carding for comparative data)
Removing the delay and manual effort leads to significant cost savings and benefits. Once an efficient and effective process has been implemented this will result in less effort required to manage the approvals as well as significant reduction in the cost of labour to manually enter data.
Contact us to see how we can improve your invoice approvals process and reduce costs