.jpeg?width=30&name=fcf4d58868b0736dbe23294dd017d32c%20(1).jpeg){kind=small}
Chris Cosgrove
Why Every Business Needs Vendor Payment Automation
Automating vendor payments is a way to streamline accounts payable, reduce errors, and protect your business from payment fraud.
Baby steppin' through the door...
There’s a saying that’s been around for some time that the more things change, the more they stay the same. In the modern world in which we live, technological advances offer us all kinds of applications and life-hacks that make our life easier…allegedly. It seems that even though we have all these cutting edge apps for personal productivity, health, directions, tasks, communications, and more, that we’re more cluttered and busier than ever. There’s a general feeling in the world, that despite all these advancements, we’re more disconnected from true connections and deep relationships than ever before. That’s great, and even may be true, but what does it have to do with Accounts Payable invoice processing and AP automation.
Begin at the beginning!
The same truism above has significance within the Accounts Payable space, especially for those encumbered with the challenge of processing utility invoices. How so? What’s so special about utility invoices?
Utility invoices are among the most complex invoices to process for a few primary reasons:
- Size - The line item volume of certain utility invoices can be excessive. This means that in some cases they can literally take numerous man hours to process, as is the case for telecom and energy utilities. As a response, some organizations process only the summary page and leave the line items out of the equation in processing, hence why there exist niche market processors that specialize in vertical markets. However, in some cases, it’s required to splice and dice these types of invoices to get accurate GL coding and booking done, especially if it’s a consolidated statement of services. Either way, the sheer length is a daunting thing to deal with and presents a big pain.
- Unique data – Whereas many single or even multi-page trade invoices will be complete with many line items that are requisite to the core needs of the purchaser, in certain instances the data being presented on utility invoices can be extremely niche, though nonetheless relevant. For example, with respect to processing energy invoices, things like cubic feet of gas, or Kilowatt hours come into play through a variety of text and graphical media, all of which are the accompanying analysis and breakdown for the period or accrued charges.
- Pricing / Service variances - Again, with invoices of lesser stature, aka, invoices with a more svelt page footprint (less pages), it can be easier to audit for pricing variances against contract data, when performing a two way match against procurement documents. When it comes to more expansive services such as utility invoices, it can be downright puzzling to figure how the vendor arrived at certain billing charges, especially with line or site drops or adds, not to mention any promotions, credits, or adjustments. This is one of the principle reasons that specialty adjudication vendors exist to improve the processing of invoices within a nitch vertical market. Their promise is to lighten the burden of processing said invoices, while providing a gain-share costing model to split the difference on any savings realized through a relationship with them.
What’s the remedy?
Well, like all invoices, there’s the same toolset required to successfully deploy an Accounts Payable automation initiative…OCR, electronic workflow, business rules, dashboarding, electronic content management, etc.
But as we’ve established in other posts, these are costly tools that require specialized IT resources to install. It’s a big reason that their installation architecture is changing to a cloud based infrastructure. People increasingly have less time, less money, and less people to spare towards non-core technology, so if they are going to pursue it, it needs to be with a vendor-partner that can fill in the gaps where they don’t have the street cred to pull it off.
Because of that, we advocate the Document Process Outsourcing revolution, which you can learn more about here. It’s the most sure-fire way to help you boost processing output, improve visibility, and reduce costs on a wholesale level in your organization.
To find out how much your payables process is really costing, you should consider a rapid AP assessment, which we’re happy to provide you with here! But if that’s not your speed and you’re a smarty-pants self study do-gooder then check out the e-Book below! Until next time, keep baby-steppin’ on to success!
