Workflow That Works: This Is Why You Want To Improve Your AP Processes

  • Workflow That Works: This Is Why You Want To Improve Your AP Processes

    Workflow That Works: This Is Why You Want To Improve Your AP Processes

    Accounts payable might not have the exciting revenue increases of sales or the fashionable benefits of new product research, but it’s certainly an important part of your organization. A well-managed AP department can nurture positive vendor relationships, flexible payment terms, and even effective cash flow. On the other hand, disorganized Accounts Payable can be an insidious and powerful drain of both time and money.

    Whether your accounts payable is working for you or against you all depends on the organization in your AP department. There are a few major pain points that all accounts payable departments share. Most companies can benefit from a thorough assessment of all of these processes. And when you start addressing these issues, you’ll also realize accounts payable process improvement.

    AP-Processes-Improved

    Improve Intake

    Simply getting the invoices to your AP staff for review can be challenging. Many companies find themselves with a hodgepodge of submission methods that make tracking nearly impossible. Whether manual or electronic, managing the daily influx and varying volume of billing documents can be daunting. And there are way too many opportunities for your invoices to go missing. A strong intake can make all the difference. Even if your images are scanned and loaded into a viewing application for manual entry, removing the burden of handling paper and electronic invoices internally will significantly improve your timeliness and reduce lost invoices.

    Proper Payments

    Audits and compliance demand proper approval of payments, but many companies find their policies inconsistently enforced. Purchase Orders can go a long way toward promoting proper payment approvals, but there will always be occasions where a creating a PO is simply impractical. Historically, companies have relied on signature books or, more recently, printed email approvals. Both of these methods require manual intervention to validate the approval and follow up if invoices aren’t processed for payment. Your ERP system may provide some approval workflow, but this isn’t always as flexible or configurable as you need it to be. In contrast, many automation workflow partners have in-application approvals for any payments. Ensure that your potential partner has flexibility in the approval routing they allow and that your team will be able to review these approvals easily.

    Timely Turnarounds

    When your company relies on manual AP processes, your department’s turnaround time can vary considerably. As many as 97% of all invoices are still processed manually. The complexity of some invoices means they require individual review. However, there may be a high percentage that just requires entry and matching to an accurate PO or a constant GL code. Find a workflow partner that harnesses automation to push these invoices directly to an ERP module — no keying or other reconciliation required. When your staff only has the exceptions to review, they’ll be able to focus their time better and avoid backlogs. Automation makes average invoices processed per AP employee jump by a factor of five. In other words, if you’re normally processing 1000 invoices per employee, automation can make it 5000 per employee.

    Centralize Control

    The larger your company gets, the more important it is to keep all your AP information in one place. If your accounting processes aren’t centralized, it’s much easier for duplicate payments to slip through when more than one employee pays the same invoice. It’s also easier for late payments to occur when everyone thinks that “someone else” is working on that invoice. Handling all your invoice processing with a single, shared system strengthens internal controls. By putting all your invoice processing information in one central system, everyone in the AP department will have access to each invoice’s status.

    Fight Fraud

    Because AP is the department that handles money leaving the company, it’s a prime target for fraudsters. They think that since money leaves the company there already it’ll be easy for them to slip in some fraudulent invoices or trick you into paying a fake vendor. Such fraud can originate inside or outside your company, and there may be more than one person involved. To fight fraud, you’ll need to strengthen your internal controls. Employing a system that automatically performs 3-way matching, catches suspicious invoices, and makes it easy for your legitimate vendors to keep their information up-to-date are three ways to fight fraud as you improve your AP processes.

    Accounting Accuracy

    Much of the AP department’s time and energy goes into keeping information accurate and up-to-date. Poor data capture often forces AP support departments to spend long hours correcting and reclassifying documents in your ERP system. Errors are especially common in departments where employees are manually entering data into Excel spreadsheets. But even with an optical character recognition (OCR) software attached, many businesses struggle to record all their information accurately. A successful workflow partner will use a combination of OCR and keying review to ensure extremely high data accuracy.

    Supplier Self-Service

    Paying invoices isn’t the only task that falls on the AP department. AP also has to be ready to handle customer service calls from vendors. And it’s in charge of keeping vendor information up to date. If you’re using a manual process, these tasks often take up quite a bit of time. But vendor information is much easier to manage if you’re using AP software to improve the accounts payable process. Setting up a vendor self-service portal lets them log-in to check payment status and update their own information. It makes things easier for them and for your AP department as well.

    Digital Data

    Keeping accurate, accessible records is another challenge AP departments need to tackle. Not only is it important that you record transactions accurately, but you also need to have the records in a format that’s easily accessible. Audits are much easier to tackle when your records are easy to understand, sort, and access. Good AP software will automatically store transaction data. Couple that with digital document management (preferably from the same software suite) and you have electronic records that are easy to manage.


    Improving accounts payable processing can be difficult, but the benefits are tremendous. With the right mix of automation, internal process improvement, and teamwork, your AP workflow can be transformed into an efficient, well-oiled machine. And if you choose NextProcess for your AP automation, we’ll be here to help you every step of the way. We’ll even give you a free demonstration so you can see how our software can help your business before you commit to purchasing it. Just get in touch with us today to schedule a demo.

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