Why CFOs Need to Consider Accounts Payable Automation

pYour company has a unique value proposition to its customers, thats why youre in business. Therefore the concerns of your CFO can be viewed differently from industry to industry and company to company. There are some, however, that seem to be universal. Were going to focus on three of them with respect to the Accounts Payable process and a title=accounts payable automation href=http://www.archivesystems.com/aspen360/APedition.asp target=_blankaccounts payable automation/a./p
h2The Problem with Paper-based Invoices/h2
pFinancial statements should reflect the work and activities that occurred in the time period for those statements. But if your invoices are still predominantly paper based or still delivered directly to the office or requisitioner of the goods or services, you may still be looking at a lag time (sometimes substantial) between the time the invoice arrives and the time you can evaluate and accrue the appropriate value./p
pThis should no longer be an issue. One of the better approaches is to outsource the ingestion of your invoices, electronic or paper. With the proper controls in place, this could streamline the entry and quality of the information associated with your invoice stream./p
pMuch has been claimed, over the last few years, about increasing the number of electronic invoices over paper-based ones. Although there seems to be ample agreement that this will improve the speed and quality of your invoices, vendors in the US have lagged behind the rest of the world in managing the conversion. Therefore most of us have to consider an operation that will not only deliver electronic invoices but process the paper ones as well. Having them both validated and made available for both coding and approval online allows you to consider all invoices as electronic because all of your information comes to you that way. Doing this allows you access to the following: br /br //p
liImmediately identify all invoice based accruals for any time period, even before the approval process has completed./li
liImmediately identify all invoiced unrecorded liabilities. In the past, this has been especially troublesome. If a paper non-PO or non-contract based invoice is laying on someones desk, the finance department rarely knows it exists. By capturing the image up front, even if the approval process gets bogged down, finance can still take steps to record it./li
liDuring the approval process, identify the burden of work for any person or group within your organization, giving you the ability to estimate approval and payment schedules.br /nbsp;/li
h2The benefits of a title=AP automation href=http://www.archivesystems.com/aspen360/apedition.asp target=_blankAP automation/a/h2
pMost AP Departments are looking to increase the productivity of their workforce without the sometimes accompanied downturn in morale. As we said above, outsourcing the paper part of the operation alone will increase the accuracy and productivity of the department. Automating the workflow for your PO matching and approval based invoices reduces the burden on all those involved in the PO process as well. Providing the tools to oversee the movement of your invoices focuses the time and effort involved directly on the problems at hand, rather than spending their time running them down. These tools and processes, now automated, provide the following benefits:br /br //p
liStraight Through Processing (matching operations) for your PO process, allowing the approval of the order to dictate the approval of the invoice where tolerances are met, lowering the burden of work for all involved in that process. If you have outsourced the capture, you have the tools to increase accuracy and therefore increase your chances to improve your matching rates. The less people that need to touch the invoice, the more productive you become./li
liAutomating your workflow (we call this SmartRouting) reduces the time and effort necessary to manage the invoice approval process. This will have the side benefit of also increasing compliancy and reducing the time in audit procedures./li
liSupervisor visibility into the process gives controls over the workflow, thus being able to balance the work appropriately in real time./li
liImmediate visibility to the invoices enables a compliant, faster, and more efficient environment./li
liProductivity for invoice processing alone increases, on average, over 40%. Less people required to manage the problem, less overtime to finish the job, less stress at monthly, quarterly, and year end closings.nbsp;
h2Improve accounts payable processes/h2
pAP Automation, of course, cannot solve all of your working capital problems, but it can manage the outflow of cash as it pertains to most spend. Many companies today are trying to be proactive and strategic in their ongoing efforts to manage cost and working capital. Accounts Payable process improvements can be a source to realize some of the financial benefits associated with working capital./p
pHaving full visibility over all invoices in the invoice approval to pay process gives the predictability necessary to manage cashflow. Since all invoices are visible, their payments can be calculated for each time period and historical data can provide the means to make month to month predictions./p
pWith the appropriate information in your hand, immediately available, so that decisions can be made in time to affect the outcome, you can evaluate the opportunities that exist throughout your business. Small changes to your daily working capital can have a significant impact on available cash. This can have a substantial net impact to your bottom line./p
pIn order to analyze key processes and identify opportunities for improvement, you will need the tools necessary to review the processes and transactional information associated with your invoice spend. A good a title=AP workflow href=http://www.archivesystems.com/aspen360/AP_howitworks.asp target=_blankAP Workflow/a tool in conjunction with good business practices can provide these./p
/li