5 Ways to Tune Your AP Automation for Maximum Workflow Efficiency and Improved Data Quality
The accounts payable department is one of the easiest places to notice if your organization is dealing with inefficient workflows and poor-quality data. A breakdown in workflow and data collection in AP has a direct impact on cash flow, which makes addressing these problems vitally important for your company.
While errors related to bogged-down workflow and bad quality data are costly, there is some good news. Data quality problems in the AP department are easily quantified because of the direct financial implications. This makes addressing them more straightforward than a similar task might be in other departments. Also, inefficient workflow is a problem that you can solve by updating your AP processing, which in turn leads to simplified data collection.
As hinted at in the above paragraph, it’s not enough to just locate the current problems and fix the mistakes they cause. If you try to correct workflow and data quality issues without tackling underlying problems, you’re just setting yourself up for more issues in the future. You need an integrated software solution that streamlines your workflow, makes it easier to gather accurate data and prevent future errors and equips you to catch and correct errors that still slip through.
Poor data quality in accounts payable directly results in problems such as over-payment, duplicated payments, missed incentives, fraud, and maverick spending. Your accounts payable department (and other company departments that work with AP) will need to perform assessment activities to analyze problems related to the AP department. The goal is to investigate and identify the root causes of poor data quality and inefficient workflow.
The problems that you might find will look a little different for each company, but there are similarities. For example, if you discover a problem with over-payments or under-payments there’s a good chance that you’re dealing with an inability to match appropriate invoice information to the payment process. That’s an error having to do with generating believable, properly contextualized data in a usable format. This type of problem also affects workflow, since you have to spend so much extra time figuring out how to fix the problems with the invoices.
It might not seem at first that workflow inefficiency and poor data quality are connected. However, the two issues do play into each other. Without an efficient workflow, it’s difficult to gather accurate data and make it readily accessible to the AP department and other financial departments in your company. Similarly, if your AP department is trying to work with unreliable data, you’ll spend so much time correcting errors and trying to figure out invoice processing that it’s nearly impossible to streamline workflow.
How quickly does your department process invoices? How many exceptions invoices do you have to reconcile each month? Implementing AP automation to streamline your workflow and improve processing reduces the average cycle time for invoices to just 5.4 days. Invoices with POs move through the system even faster, typically in 12 hours or less. If your accounts payable department is less efficient than that, it’s a good time to update your process.
Once you identify the problems that stand in the way of efficient AP workflow and data collection, you can start taking action to correct the issues. This step involves designing a plan for correcting data quality, optimizing cash flow, and integrating data quality strategies with the entire accounts payable department.
When designing a data quality correction plan, you need to identify the root causes of each issue and take corrective action. For example, if duplicate payments result because the AP department pays for goods without a receipt, you need to implement a receipt matching system. If you’re missing payments because there’s a delay entering new vendors into the system, you need to increase efficiency in that area. It is in these steps that automated AP software starts to play an important role.
Implement AP Automation
NextProcess’s accounts payable software instantly reduces costs and provides detailed oversight into invoice processing. You’ll improve accounts payable workflow by collecting data from paper and electronic invoices accurately and efficiently, issuing the correct payments on time, and centralizing control of AP processes. At the same time, you’ll have an easier time-fighting fraud and enforcing company policies.
Our software processes invoices automatically routes them for electronic approval and matches invoices with purchase orders. Every single AP event is logged and easy to access so you can double-check any data you’re suspicious about. All associated documents are stored digitally. You can access information about current and past processes from any internet-enabled device so long as you have the correct log-in permissions.
When you use a system like NextProcess’s AP Automation Software, it corrects many of the problems that come from poor data quality and/or inefficient workflow. It is also designed as a sustainable system that continually works to preserve data quality and prevent errors. We’ll take care of updating the software for you, so you continually see improved functionality. We also scale our service to your needs. That means you’re only paying for what you use each month, and your company can handle any unexpected surge in AP processing.
If this sounds like an accounts payable automation solution that will fit your business, contact us to schedule a demonstration. You can see first-hand how automatic AP software can simplify and streamline accounts payable, saving your company both time and money.