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The Ultimate Guide to AP Automation Software

June 7, 2016      

Automated Accounts Payable Process Overview

Invoice Receipt

The beginning of any AP lifecycle begins with invoice receipt. There are two primary ways to input invoices electronically into a workflow system—through the use of a scanning and OCR data capture process or an eInvoicing network.

Matching and Routing

Workflow solutions enable AP departments to define how different types of invoices are processed. Invoice matching and routing involves linking invoices to purchase orders and then sending them through the appropriate approval chain.

Approval Workflow

Once invoices have been validated, matched, and routed into the appropriate queue, a variety of approval workflow capabilities ensure that they are approved in a timely manner.

Payment Integration

Electronic payment functionality is very important for efficient AP, as it is the final step for a secure and swift workflow. Many solutions offer in-house payment capability, or directly integrate with leading payment providers.

Identifying Opportunities for Improvement

Most paper-centric AP operations have an opportunity to take small steps that result in large rewards, but you can’t improve it if you don’t measure it. The foundation of a successful AP automation software implementation is based on a realistic picture of where you are now in terms of your AP efficiency, and where you want to go.

Process redesign and automation can bring lasting benefits, including:

» Reduction in manual, low-value effort

» Lower processing costs

» Invoice workflow transparency

» Faster approval and departmental visibility

» Ability to capture early payment discounts

» Business intelligence and process insight

» Moving closer to holistic Purchase-to-Pay automation

Where Do You Stand on the Path to AP Innovation?

Cost-per-invoice metrics

You can take action now to begin your AP transformation. The steps focus on recognizing the true value of electronic invoice receipt, process specialization, and implementation of electronic payment methods.

1. Develop a plan to reduce data entry and increase automated processing in AP. Electronic invoice receipt via a portal or network will make invoice receipt touchless and help eliminate supplier invoice inquiries.
2. Establish automated matching, workflow and posting processes to expedite invoice approval times and reduce manual touches. These include finding ways to pre-approve and auto-post invoices.
3. Implement electronic requisition, PO creation, and ordering to increase ability to initiate collaborative commerce and eInvoicing with suppliers.
4. Increase ePayment formats beyond ACH—consider implementing virtual card payments.
5. Reprioritize staff time to focus on process measurement, task analysis, and value-added, revenue generating tasks.

To find out more, check out our 2016 AP & Working Capital Report: Unlocking Savings in Accounts Payable with Working Capital Optimization.

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