CloudX Blog

Have a heart for your loved ones in the Accounts Payable Process

Posted by Chris Cosgrove

Feb 14, 2013 10:29:00 AM

Have a heart for those involved in the Accounts Payable process!

 

Happy Valentine's Day to all you in the Accounts Payable world!

 

Valentine’s day is recognized the world over as a special occasion in the year when lovers recognize and direct their affection towards each other through a variety of sentimental means.  Gift-giving, whether it is confectionery, floral, or greeting cards, is the modus operandi for most people that participate in celebrating this romantic day.  So in the context of shedding some appreciation on love towards all of our Accounts Payable friends who routinely save the day (Month/Quarter/& Year for that matter!), we at CloudX thought it would be apropos to send a little Valentine’s love your way.

In our opinion, the best Valentine’s gifts (chocolate aside) for most AP professionals would be the gift of peace of mind.  Seriously, many AP Directors and Managers are beyond stressed with the workload and daily burdens of the AP process and function.  Managing staff, providing reporting, ensuring accurate invoice entry, monitoring KPI’s, preventing fraud, ensuring compliance standards are met, satisfying vendors, improving processes, closing the books, and a litany of other tasks all go into the equation when balancing work/life standards. 

 

With that said, here’s a quick hit list for any last minute Valentine’s day shoppers looking to give that unforgettable, life changing gift to their AP sweethearts.

 

1.Accounts Payable Software – To use a broad term loosely, we think that this should encompass the ability to convert an invoice to data (from any native format – paper/pdf/tiff/edi/other) from the outset of the process, then validate the invoice data against ERP data (Vendor Master File/PO Tables/Business Rules – Approval Workflows), automate the routing and processing, and filter out items for exception handling.  Get the mundane stuff that sucks up time and energy out of the way, and isolate the stuff that needs attention and provide visibility to that…pronto!

2. Vendor Portal Technology – Another time consuming and everyday issue that AP leaders face is satisfying supplier inquiries about the status of payment on any given invoice.  At times, AP managers and supervisors are required to get in the midst of vendor disputes to affect positive resolution for both parties.  Unfortunately, this is a time consuming process for both suppliers A/R representatives, as well as AP staff.  With that said, by leveraging Vendor Portal technology, you can facilitate dynamic supplier invoice submission. This way they don’t have to print and mail invoices anymore…saving them time and money.  Also, in conjunction with the technology stack listed under point 1, they can have access to viewing where their invoices are by status…ie. have the been ‘Received’, ‘In Approval’, ‘Approved’, ‘Posted’, ‘Disputed’, etc, and thereby you can cut down on that inbound call volume by promoting a self-serve approach.

3. Dynamic Dashboards – By using the invoice data captured at the process outset with AP software, you can splice and dice the data to your heart’s content and use the data to make your life easier.  With it, you can speed the month/year-end accrual process, by associating invoices with GL data automatically, and make your outstanding spend efficient to retrieve.  In manual environments, this involves tracking down approvers and hodge-podging a forecast.  Also, you can use dashboards to identify chokepoints to processing invoices (especially Non-PO) and to identify early payment discount opportunities (by capturing invoices with terms and prioritizing them chronologically).

4.  Audit Utilities – The Accounts Payable audit is another one of the fun gyrations that AP leaders have to go through on an annual or biannual basis.  Generally speaking, it’s not difficult, but more cumbersome, especially if you’re managing your invoices outside of an electronic AP system.  Paper takes more time to locate records and provide them to auditors, whereas managing invoices and correlating documents in an electronic database format tends to be much faster, promoting a better audit experience and reducing audit cycle times (and your audit bill!).

 

We know this is a little bit whimsical today, but in the spirit of Valentine’s day, we wanted to give anyone who was on the fence about what to buy their loved one another great option.  I mean who really wants more chocolate, champagne, roses, a dinner out, jewelry, or trinket, when you can have awesome technology like this? ;-)

 

To learn more about Accounts Payable best practices or whether AP Automation, e-Invoicing, or AP services  (via document process outsourcing) are right for you, check out our eBook below!

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Topics: AP Process, Invoice Processing, e-invoicing, ap services, Accounts Payable Process, accounts payable software, accounts payable best practices, accounts payable audit, ap software, document process outsourcing

Using Accounts Payable Software & AP Services To Improve Visibility

Posted by Chris Cosgrove

Feb 9, 2013 1:13:00 PM

 

Accounts Payable Process Automation gives you X-Ray vision into all your AP data!

AP Automation gives X-Ray vision to Finance Leaders!

 

Finance Executives, Shared Services leaders, and AP Managers all pursue Accounts Payable Automation initiatives for a host of different reasons.  Most of these folks know from witnessing inefficient processes that there are ways and means to effectively transform the process especially in light of recent technology advances.  As we’ve discussed in this post, there are compelling gains to be had across three primary areas:

Financial – Reduction of Invoice Processing Costs, Elimination of Late Fees, Increase in Early Payment Discount Capture

Operational – Elimination of Data Entry, Elimination of Manual Validation Steps, Increase in Invoice Turnaround Times, Elimination of Paper in the Process

Strategic – Increase in Process Visibility, Elimination of Process Chokepoints, Increase in FTE Productivity, Promotion of Compliance Standards, Promotion of Green Initiatives (Environmental…not money…that’s already covered!)

 

Accounts Payable software/services to drive automation creates intangible value too!

 

For starters, by getting out from under paper, you blaze a trail to transforming the fundamental role of AP from being a data entry shop to being a strategic asset to the business.  With AP automation, and visibility, as we’ll discuss in a second, the role of being a strategic partner becomes one of optimizing business outcomes.  In AP land that means chasing down, promoting, and capturing early payment discounts and providing superior customer service (Internal & External).

In addition to that, just making the Approval & Routing process for invoices electronic is a stress relief for all involved parties.  By going with automated workflow, you lighten the load for Approvers, GL Coders, and AP staff who are constantly chasing invoices in a manual environment.   From an AP management perspective, this will help you isolate and remedy process chokepoints and invoice exceptions that require intervention.

 

Your vendors will thank you too!

 

Visibility has implications for your vendor community too.  Through the use of vendor portal technology, you can empower vendors to self serve and check on the statuses of their submitted invoices.  (Sidenote – this is kind of like the checkouts in your local supermarket…have you noticed a trend over the last 3 or 4 years with all the self checkout lanes?  If it’s been largely accepted there, don’t you think your vendors might benefit from the same philosophy?  Just sayin’…)  People like to have control over their stuff…and vendors are not different.  You get the added benefit of cutting down calls into your AP staff that takes them off task by providing visibility into invoice information through automation of the Accounts Payable process.

 

Your CFO might just be your new BFF!

 

For Finance & Treasury executives, visibility into AP pipeline (and of course drill down to individual invoices) data ushers in new levels of accuracy and reporting not previously possible.  This can facilitate enhanced cash flow management and truly optimize the use of working capital.  For many organizations (healthcare in particular), capturing early payment discounts is difficult not just because of a lack of visibility, but also because of tight cashflow reasons.  With visibility to invoice data you can selectively choose which invoices can be accelerated for EPD capture within the constraints that present cash positions will allow for better spend management.

Visibility also has impacts upon invoice search and retrieval.  When invoices are indexed and classified within an AP system, the time spent searching for and finding them is drastically cut down compared to manual, paper laden environments.  This can help any internal personnel that need access to AP data, and also can help shorten Accounts Payable audit cycle times as producing the required records is expedited and requires less assistance from AP staff.

For many on the fence about AP automation, certainly looking at core items such as data entry reduction, eliminating manual work (physical process validation steps), and cost reductions are all factors that compel leaders to embrace change and move forward with improvement initiatives.  Visibility in all of these areas that we’ve discussed should be considered as well, and for many will be the icing on the cake after deploying automation through AP software or AP services.

 

To learn more about visibility and the impacts it can have on your Cost Per Invoice (the cost it takes to move an invoice in your organization from receipt to approval) check out our eBook on Uncovering the 7 Costs to Process an Invoice here!

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Topics: Improve Accounts Payable, ap system, AP Process, ap services, Accounts Payable Process, accounts payable software, accounts payable audit, early payment discount, ap software, accounts payable improvement, ap automation

Accounts Payable Process - 9 Ways To Slash Costs Quickly

Posted by Chris Cosgrove

Feb 5, 2013 7:42:00 AM

Slashing Accounts Payable Process Costs Rocks!

According to recent economic data, the road to recovery for the US economy is still fraught with uncertainty and less than optimal results. 

 

The tepid recovery that has been underway for sometime appears to have stagnated, with actual GDP contraction in the fourth quarter of 2012.  Some economic experts anticipate more of the same in the first quarter of 2013 with results essentially being neutral and according to others, even indicative of recession level benchmarks.  With that said, many organizations are also bracing for rising tax burdens, healthcare costs, and pension liabilities.  So, as a means to foster improved organizations fiscal health, we wanted to contribute 9 ways to reduce cost in your AP process.

 

Here’s a recession busting list of 10 Account Payable best practices to make AP more profitable and better the financial health of the company simultaneously!

 
  1. Pursue AP Automation through cloud initiatives.  This will help you cut processing costs by eliminating data entry and manual workflows.  Cloud infrastructure generally represents a potent alternative to traditional Accounts Payable software system deployment and is typically not shackled by high investment costs to deploy.  Also, cloud delivery often reduces the amount of IT resources and time required to support systems, making this appealing for companies from SMB to Fortune 500 level.
  2. Adopt electronic payment alternatives and incentivize your suppliers to accept e-payment methods.  Accounts Payable solutions for payment include P-Card, ACH, e-Invoicing, & many more.  According to The Accounts Payable Network benchmarks, it can cost upwards of $5 to process a physical check.  As a stark contrast in cost, ACH transactions cost under $1.50 to process.  That represents close to a 70% savings in cost, not even factoring the time impacts of electronic payment compared to traditional methods. 
  3. Centralize AP Invoice Receipt – Many organizations with broad geographic footprints have a difficult time getting invoices into AP directly and in a timely fashion.  This is also true for organizations that have multiple business units, with invoices coming into the business unit first and being forwarded to AP from there.  Whenever possible, centralizing the invoice processing function to a standardized and centralized approach will result in consolidation benefits.   This is also being rapidly enabled through flexible capture solutions.  By leveraging investments in multi-function and even mobile devices, you can now onboard AP documents from virtually anywhere.
  4. Ditch using Checks for Employee Reimbursement – Similar to getting vendors set up on electronic payments, printing check for employee reimbursement is costly, paper burdened, and inefficient.  Explore Direct Deposit alternatives to get them their money quicker, easier, and at a reduced transaction cost to yourself
  5. Collaborate With Procurement To Increase Early Payment Discount (EPD) Capture – Companies of all sizes are being disaffected by challenging economic conditions.  This creates an opportunity for those who can turn invoices around quickly and execute early payments.  By working in conjunction with Procurement to negotiate supplier discounts and then executing invoice processing and payment within AP, EPD’s can quickly become the biggest financial contribution AP can make on organizational performance. P.S. AP departments that automate their processes capture 90% of available discounts, compared to those who don’t who get only 18% of what’s available according to Aberdeen data by the way!
  6. Deploy Fraud Detection Technology – By looking for fraud within AP, companies can often cut down on funds leaking out of the organization.  Simple items like stopping duplicate payments can significantly contribute to errant or even malicious cash outflow.
  7. Improve AP Productivity Through Dash(Score)Boards – When benchmarking AP productivity and monitoring KPI’s in a public space, two things occur; 1. You establish a framework for performance, and oftentimes AP staff will strive to improve their productivity.  2. You can create a platform to create organization awareness to how AP is contributing to organizational health and fiscal performance.  It’s kind of like the difference between someone who goes to the gym to socialize and the personal trainer who meticulously records performance levels while helping their mentees shatter performance barriers.
  8. Transform AP Staff From Mundane Work to Strategically Valuable Work – Part of this has a lot to do with removing big rocks (obstacles) from the process…data entry, manual validation, paper processing, etc.  When you do that and start to consider AP as a customer service position internally and externally in conjunction with a department that has significant ability to improve financial performance, hedge risk, and provide dynamic reporting, you realize that AP can make a significant difference as a valued resource to corporate performance.
  9. Consider Using Accounts Payable Audit Services – In many organizations, Credit Memos are processed incorrectly, Duplicate Payments occur, and a host of other issues transpire with respect to incorrect transaction bookings.   Contracted AP recovery audit firms can help recover misappropriated or unclaimed funds usually on a contingency basis.

To identify other ways to reduce cost in your AP process, it’s a good idea to know the costs that abound within the invoice approval process.  Check out our eBook on Uncovering the 7 Costs below!

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Topics: Invoice Processing, Accounts Payable Solutions, AP Process, Accounts Payable Process, accounts payable software, accounts payable best practices, accounts payable audit, ap automation

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