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3 Secrets to Streamlining Accounts Payable Management

accounts payable

Paper is out; automation and digitization are in. No surprises there: Just look at the publishing industry and think about the last time you actually read a newspaper., the ever-surging dominance of online communication has virtually eliminated cards and letters, and yet accounts payable is still stuck in the 80’s or even earlier. Yes, accounts payable management is no exception when it comes to process improvement via automation, digitization and cloud-based innovation.

How do you streamline your accounts payable process? Here are three big-ticket tips to transforming your accounts payable process into one that slims down resource usage and beefs up that bottom line.


THE PAYABLES BITE [into profits]: 

According to Paystream Advisers’ IWA Adoption Benchmarking Survey Report, 55% of organizations are still conducting more than 80% of their invoice processing in paper format. Given smart organizations’ constant crusades to slim down all things wasteful, this is unacceptable, to say the least.

  • The painful process: Paper-based workflows and inefficient capture methodologies are slow, inaccurate and poorly defined.

  • The painful product: Processing duplicate invoices, “missed” vendor payment discounts, poor management of working capital and less-than-pleasant vendor feedback regarding invoice status queries.

  • The painful cost: small businesses still spend over $14 to process an invoice.

THE PAYABLES FIGHT [for efficiency]: Ready to streamline AP processing? We thought so.

1.) When it comes to invoice reviews, start rethinking. 

Determine who should really be reviewing invoices. Don’t continue business as usual just because it’s, well, “business as usual.” This is not about falling back on whoever’s been reviewing invoices up until now; it’s not about maintaining familiar processes and standard procedures just for comfort’s sake. It’s about moving forward with the most effective strategy that puts invoices in the digital hands of the most qualified individual at the right time no matter where they are located.

    • Document the risks to your organization if an invoice happens to slip through.

    • What is the most logical workflow to fine-tune your review process and remove these slip-through risks so that you have the fewest number of reviewers possible?

    • Conduct random spot checks to keep people honest and on their toes. 

    • Require electronic reviews and stop pushing paper.

2.) When it comes to payables, keep things in check.

Slimming down paper doesn’t mean throwing it all away. Keep your supporting documents, too! With the whole automation versus manual processing debacle, there is a happy medium … and this is where that seed of AP efficiency really starts taking root.

Some tips to keep Payables in check:

    • Use the information that you have stored in your accounting system for invoices that reference a purchase order number. If you don’t want reviewers to access your accounting system, keep a copy of your Purchase Orders in the same system that you are automating payables in. 

    • Integrate capture automation software, like Optical Character Recognition (OCR), with your back-end accounting system to amp up accuracy and reliability, boost AP processing efficiency and cut down on human error.

    • To reduce errors when using OCR automation, don’t write on accounts payable documents the writing is often incorrectly recognized, causing the process to stop for human correction. If you need to collaborate on this item make sure your electronic accounts payable system has a notes and collaboration feature instead.

    • Perform consistent quality checks to make sure the electronic process is working smoothly and doesn’t need to be tweaked to reflect a process change.

3. When it comes to the accounts payable process, don’t underestimate it. Automate it!

The AP process has its fair share of puzzling, process-clogging inefficiencies. Cultivating that seed of AP efficiency may seem daunting at first, but that’s where accounts payable software comes into play.

Use AP software solutions to make the following game-changing process improvements:

    • Secure and keep track of all incoming invoices and related documents (e.g., POs, notes and disputes).

    • Ensure early-payment discounts and eliminate late payment fees.

    • Virtually eliminate data-entry errors with automated OCR and Kofax integration.

    • Compare approved PO amounts to invoices and eliminate overpayment.

    • Ensure that all of your accounting procedures and approvals are adhered to with automated routing for review, approvals and processing.

       


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Topics: Accounts Payable/Receivables

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