CloudX Blog

5 Accounts Payable Workflow Software Best Practices You Need to Know

Posted by Chris Cosgrove

Sep 21, 2016 1:34:28 PM

accounts payable workflow software best practices are the yoda way

We will always champion AP automation!


While some may argue that AP automation is old news and bolder, fresher ideas like e-invoicing are the way forward, the fact remains that even best in class, leader type organizations can not mandate 100% adoption of these means.  Just as other advanced technologies like EDI have not displaced traditional invoicing there is and will remain a segment of all payables departments that depend upon alternatives to manual invoice processing. However, there are certain ways to doing things once the AP automation effort has begun that will yield better results than others.  As such, we thought it appropriate to take a more instructive role in this post to foster some ideas that may assist you in your quest to achieve maximum efficiency.


Here are five best practices to make your Accounts Payable workflow software deployment optimal!


1.  Leveraging location - One of the best ways to tap into the automation potential of AP workflow software is to harness header data off the invoice to drive the electronic workflow to the correct processor or approver.  In this case, if you have a geographically distributed business and correlated AP process, this is an ideal way to ensure smooth processing of invoices by your AP team.  By capturing the City, State, and ZIP information off the invoice header, you can use a geographic assignment within your workflow configuration to get invoices to their correct destination faster.  As an aside you can also leverage delivery (ship to or services rendered to) info as well.  This is a tactic that is especially helpful in processing third party invoices.


2.  Vendor assignment - Another easy to deploy and beneficial method to improving your accounts payable process is to auto-assign vendors to processors, GL-coders, or approvers by vendor.  This helps expedite vendor specific invoices to the correct processing route without intervention and eliminates manual processing steps.  This is an elementary step to deploying workflow and is probably the lowest hanging fruit from all the items in this list and should be done at the outset of an AP workflow software roll out because it’s very simple to put into motion.


3.  GL Coding Restrictions by Approver - This is more of a control to prevent errant coding of invoices, but one that should not be neglected.  In conjunction with a phased roll out departmentally, which is something we absolutely advocate, we believe that by restricting the available GL codes that an approver or exception handler has to choose from (think drop down menu), the chance of them selecting the wrong code and creating an inaccurate expense booking diminishes drastically.  


4.  Delegation in Absentia - Delegation becomes an important component for process continuity management especially as it relates to employees who are required to approve invoices who may have to travel frequently, or are out on vacation or leave.  Having delegation rules built into your workflow eliminates process bottlenecks and saves invoices from getting lost in the cracks of the process which can then result in missed discount capture or worse late payment fees.


5.  Automated Reporting - Reporting from workflow metadata is key as well to monitor the process of invoices throughout their various stages so you can see which invoices are moving swiftly through the process and which are bogging down.  Common breakdowns can be assignment by approver, department, vendor, amount, terms date, or due date.  By having automatic views into each of these data points intelligent action can be taken to ensure the best possible business outcomes.  Additionally, month end closing processes such as the common practice of accruing outstanding ‘suspected’ invoices in queue, can be facilitated in a moment because once invoice data is available within the workflow / business intelligence system, it’s available for dynamic reporting, which in turn will save manual effort associated with compiling that data outside of a system.


Moving Forward

Hopefully these 5 best practices to AP workflow software deployment give you a positive frame of reference for maximizing how your organization goes about automating AP.  If that’s not something you’ve done yet, we think you should check this out!  Also, if you’ve done this but haven’t monetized your process, you’re leaving money on the table instead of turning AP into a strategic profit center and we think that’s silly!  If you’ve a mind to achieve greater value and contribution from AP to your organizational health, then check this out!


Free eBook on AP Automation vs E-Invoicing:  What's Right For My Business?


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Topics: Accounts Payable Process, ap automation, accounts payable workflow, accounts payable workflow software, ap workflow software

Beyond Accounts Payable Workflow Software

Posted by Chris Cosgrove

Aug 22, 2016 1:58:37 PM

Take your accounts payable workflow software beyond!

Beyond is a funny word.

By definition it means ‘at or to the further side’ of a given object.  However, the nuance that I’d like to extract out of it today is in the essence of it being greater than or further reaching than an original state.  As a case in point, in our most recent blog post we examined three key reasons why accounts payable workflow software is an absolute must to a highly automated process.  However in today’s take, I think it’s necessary to look past just the workflow at the other components that will take your productivity and processing capacity to the upper echelons of automation standards.

So in addition to accounts payable workflow software, here are three components that you should be leveraging to juice your accounts payable process for everything it’s worth.

Business Intelligence aka ‘Rules’

Part of an effective automated accounts payable workflow software setup is the logic tree that drives the workflow forward.  In plain terms, one of the best things about an AP workflow setup is that you can auto-route invoices to approvers or even auto-GL code invoices based on a variety of triggers.  As an example, invoices from a specific vendor or sent to a specific location, can be auto-assigned in powerful AP software systems to wind up in the right person’s inbox, thereby eliminating all the extra manual touches in between receipt and final destination that beleaguer so many AP departments the world over.  Eg. Apple or VMWare invoices might be auto-routed to an IT Executive, since that is the department head responsible for liaising and approving technology vendor invoices.  The recouped time from the initial receipt and routing can mean valuable time gained in turning around invoices that are eligible for discounts and can thus be revenue generators (even in the back office, which is really cool!).

Additionally, BI can be used to auto approve invoices on a matching basis assuming the matching criteria is within a user-defined acceptability threshold.  Say on a $5,000 invoice, that a 0.5% threshold was acceptable, it would mean that the invoice could be plus / minus $25 and automatically match for payment.  By match, I mean reconcile automatically against PO or Receiving data or both.  Once the match occurs and the BI checks the math, it can trigger the invoice close in the ERP and then execute payment if you have automated payments set up.  If you don’t you should really look into it, because besides the EPD gains above, the next best way to monetize your AP process into a profit center is through ePayments!


While this is briefly mentioned in the preceding paragraph, it really merits further consideration.  So many companies never invest strategically into their accounts payable process because they often run into the buzzsaw that is AP software sticker shock.  This is especially true for those legacy companies that provide software in a traditional install base environment.  The typical ROI period for those scenarios can range from anywhere between 12 and 24 months, but as we know, more demanding finance leaders want returns now not later.  As such, a cloud or SaaS provider gives more flexibility when leaning upon a transactional costing model, and typically has lower start up fees.  Now, with all of that as a backdrop there is an obvious and genuine desire for fiscal stewards to slash as much cost from the process as possible.  However, the other side of the coin that doesn’t get nearly the attention it deserves is centered around optimizing payment types for monetization.  This comes through a strategic and automated shift towards virtual card payment (ACH too, but that’s more from a cost reduction play).  Through this approach, you tap into the interchange available between the clearing house and the vendor that is accepting payment.  In many cases you can earn 1-1.5% on your spend, which is like picking up free money just for changing your payment type.  On average, we’ve seen that nearly 33-40% of businesses are willing to accept virtual credit card transactions because they are faster, more secure, and easier to process than checks or other methods.  Between this and expanding the scope of early payment discounts in your department, you have a latent ability to literally convert AP into a strategic profit center, a thought previously undiscussed in the AP landscape.  


One of the key benefits of automated accounts payable workflow software is the total visibility that it delivers to you.  By being able to see invoices at any stage in the accounts payable process, all guesswork for where something is at or how it arrived there is gone.  Instead, a rich audit trail gives you insight into all decisions around a transaction and a powerful system gives you the means to expedite, delegate, and otherwise handle any situation.  Reporting can be leveraged to automate month end processes like accrual forecasting or for delving deeper into analytics around your supplier base.  There are some nifty tricks you can leverage reporting for as well, especially around the area of fraud prevention or around cyclical audits.  The key thing is though that when all of your invoice data is indexed and searchable against multiple data points, you have a wonderful ability to extract value out of it that was previously impossible.  For many people, the report generation tools within their ERP are very limited or are functions that have to be passed off to IT staff that have to execute special scripts just in order to pull the data, which can be a show stopper from ever getting the analysis in the first place.

Making Your AP Process Beyond…

Perhaps you’ve just read about these and have some questions about how this might look like in your environment?  Well, part of figuring that out is assessing your current state of operations and going from there.  If you’re interested in a free AP assessment to see how you stack up against leading, third-party industry benchmarks, then we’re happy to help you with that...just click here!

Free eBook on Unlocking Profit From Transactional Document Processes!

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Topics: Accounts Payable Process, AP Process, Virtual Payments, accounts payable workflow software, ap workflow software

Accounts Payable Workflow Software - 3 Reasons Why You Need It

Posted by Chris Cosgrove

Aug 18, 2016 11:36:32 AM

Why Accounts Payable workflow software is the hottest thing since sliced bread!

An homage to Otto Frederick Rohwedder

Today’s post will be a sort of odd homage to someone you’ve surely never heard of, but whom I guarantee has had a profound impact on your life, especially if you’re a citizen of the United States.  We want to give credit where credit is due, so with that said it’s time that Otto gets his.  Who’s that you say? I’m glad you asked.  It turns out that Otto, invented the first truly effective commercial bread slicer to come to market.  While the technology existed to slice bread mechanically nearly seventy years prior, the shape and size of loaves weren’t suitable to this end until the 1930’s which is when the golden era of bread on a mass produced scale was ushered in.  (More on that here...) What on earth does this have to do with Accounts Payable workflow software though, besides the toast that you’re possibly munching on presently, or the tasty cushion for your BLT you’ll be enjoying in a few hours…?  Well, the adage that this or that product is the hottest thing since sliced bread became a well known cultural idiom in our American lexicon, possibly in part due to Wonder Bread’s use of it as a marketing gimmick in the post 1930’s era.

Ok, now that we’ve beefed up your knowledge of mid 20th century America, as it relates to food history it’s time to connect the dots to the modern world and the Accounts Payable process landscape that we live, work, and play in daily.

Accounts Payable Workflow Software is the hottest thing since sliced bread if you’re looking to transform your AP process, but why?

Well, we’ve put together three simple reasons for your reading pleasure...and while we understand and endorse multiple methods for improving AP, like EDI or e-Invoicing as highly advanced technical options, the reality is that for most businesses those approaches are untenable and won’t cover a high percentage of their vendor and invoice population due to resource constraints and onboarding challenges.  More on that here…

3 Reasons Why You Need It

Process Speed

One of the biggest bottlenecks for Accounts Payable processes the world over, and one that can be remedied through Accounts Payable workflow software is the time it takes for an invoice to travel through an organization while it gets GL-coded (aka when it is assigned the appropriate cost center by which it should be booked) and ultimately approved.  For many businesses this is still a manual or quasi-manual process whereby an end approver needs to see the invoice and then physically write down the appropriate expense code along with a signature and date before the invoice can be booked into the accounting system and ultimately paid.  While that might’ve been effective in the past, albeit not pretty, it really should have no more sway in today’s payables landscape.  Accounts Payable workflow software should be configured to automatically route invoices by some logic set including vendor, ship or receive location, or other unique attribute to assign it to the correct approver in the organization.  Interoffice mail, e-mail, or God-forbid, express courier should be entirely obviated through this effort, reclaiming precious lost time where the process would otherwise lag.  Oh, by the way, one of the by products of a faster process is that it becomes the enabler to pursuing advanced and favorable payment outcomes, to include early payment discounts.

Cost Slashing Benefits

As a tangent to the point above, the cost associated with the manual distribution processes for invoices can range from relatively low, to exorbitantly high.  Interoffice mail, physical mail between departments, or express courier packages working their way between offices can range from $.50 to over $1-2 per INVOICE.  In a climate where most businesses are trying to reduce cost and give themselves advantages to competing, this is a step in the wrong direction.  However, for every invoice that you can successfully route through your Accounts Payable workflow software, you can slash that spend by over 90% in many cases.  If that’s not something you’ve looked into, then we advise you to...quickly!

Total Visibility

The biggest benefit to AP workflow software, arguably, is the transparency that it renders to the entirety of the process.  When you have insight into every stage of your AP process from invoice receipt, through exception handling, to matching, to coding, to approval, to release to ERP, to payment...well you get the picture!  You are not an outsider to the process wondering what is going on or how to get to the bottom of where an invoice is, but you are the master of your fate...the captain of your soul...or at least your Accounts Payable process.  Visibility is something that helps AP administrators, managers, and controllers alike to expedite processing and eliminate bottlenecks.  It’s also a handy thing when it comes time for audits and makes understanding how invoices have flowed through the organization and how decisions have been made.


For these reasons, like we said before Accounts Payable workflow software is the hottest thing since sliced bread, especially for those companies who can’t pull of EDI and who have deployed or can’t deploy e-Invoicing.

P.S. - While Accounts Payable workflow software is the goods, you’ll need more than that to transform and optimize your process...check this out to get our thoughts on what the utopian scenario for AP invoice processing should look like in the 21st century!

Free eBook on The 7 Best Practices To AP Automation!

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Topics: Accounts Payable Process, AP Process, e-invoicing, edi, accounts payable workflow software, ap workflow software

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