Accounts payable: busy work? Or critical business function?
Accounts payable processes are highly transactional and typically very labour intensive. Invoice processing for accounts payable consists of time-consuming tasks which makes poor use of internal resources in an increasingly challenging labour market. Although accounts payable (AP) can seem like back office busy work – in reality, it’s the backbone of an organization.
Prior to the pandemic, many businesses didn‘t actually believe critical financial processes could be effectively run via remote and distributed models. That’s all changed.
Outsourcing AP front-end functions can be beneficial – if you choose a partner who can meet your needs. Experts at Ricoh have compiled solution values to look for when you’re considering a business process automation partner.
Digitization and AP automation
Look for a blend of intelligent capture software-as-a-service (SaaS) and process automation, coupled with robust quality control steps that meet your unique needs. Done right, AP processing improvements can help drive down overhead, help repurpose labour resources to higher functioning tasks, increase efficiency and enhance accounts payable oversight. Best-in-class AP automation processing services should provide efficient intake of both digital and paper invoices, cutting-edge data extraction tools, business rules processing, exception handling, image/data hosting and valuable analytics reporting.
With a strong digitization and AP automation solution, invoice processing can be completed in a fraction of the time with a higher level of accuracy and a strong return on investment.
Business rules exception processing
There are many common problems in invoice processing that pose challenges for AP departments and they often result in missed early payment discounts, late payment fees, vendor conflicts and lost revenue. These problems are often amplified for larger organizations with more than one AP platform and decentralized purchasing. Some of these challenges and possible fixes:
— Duplicate invoice identification: stop paying a vendor more than once by automating the identification of duplicate invoices based on a comparison of data on incoming invoices to invoices already paid.
— Unapproved vendors: most AP departments are not set up to pay invoices coming in from vendors who have provided goods and services to their organization if the vendor is not set up in their system and registered as an approved vendor. A strong business process solution should be able to provide an automated response to these unregistered vendors and provide them with the link to register and instructions on how to resubmit their invoice, saving the AP department time and having to deal with angry or frustrated vendors.
— Duplicate vendors: it is common that vendor databases have the same vendor listed multiple times with multiple contact names, addresses and account numbers. Automated processes can help to efficiently identify multiple vendors with similar names that are causing inaccuracies when matching incoming invoices to the correct account.