AP Automation is not a new thing, organisations have been investing in this for many, many years. Following the market trends and accessing new technologies and solutions.
However, for organizations that have not invested, or have not revisited the market for more than a couple of years, one important question is at the forefront of their mind.
“Can AP Automation save a finance team time?”
We are living in a world where technology and society are moving forward faster than at any other point in living memory.
One of the biggest impacts of this is that we are all trying to deliver more, in less time.
With breakthroughs happening, almost daily, in Robotics, AI and Automation, what becomes important is considering how these tools and solutions can be put into play, in real environments.
The aim? To save us all time for the more important things in life. Be that at work, or at home.
Faster Receipting of Incoming Data.
What we are going to do, is take a look at just a few of the areas in which an organization could save time by making use of AP automation. Up first, the speed at which information can be captured and processed.
In a traditional, or manual, AP department, incoming information will need to be sorted and distributed to a team of clerks for processing.
The first sort is likely to be classification of documents, this may well be done in a post room (the first reference to creating cost in other departments)… But could as easily be done in a centralized or decentralized AP team.
Once the envelopes have been opened, and the e-mail attachments opened (and printed?) then the tedious task of copying this information into spreadsheets and/or ERP’s begins.
Even the very best at this process can normally only achieve an average between 10,000 and 15,000 invoices per year, per clerk. This would equate to roughly, at the top end, about 8 invoices an hour.
So now let us apply technology to the process of simply capturing this data.
First, the e-mails and e-mail attachments. You do not need to open them. Nope, not even the ones with multiple attachments.
Any automation solution worth its salt will offer e-mail capture, with the ability to determine the beginning and end of each invoice, whether this is a consolidated document, or even an EDI feed. And then treat these according to your business rules. Simple.
Now to the paper. Ok, so you will need to open the envelopes and scan the documents. You don’t need to batch these, sort them, or otherwise handle the documents though. Again, a system worth having will not require this manual process.
Of course, what you would be better doing is removing these paper invoices all together.
Inform your suppliers that you are going to a paperless process and that they have two options:
- They can e-mail their invoices into a dedicated mail box (or boxes) or,
- They can upload their invoices, or type their invoice information into an online portal.
The benefits of a paperless function are already well established, for both you and your suppliers.
Clean, Clear Audit Trails.
How much time is spent within your organization preparing for and handling audit? Internal, monthly, quarterly, annual, external?
Next, how much of that time is spent simply looking for lost invoices, missing authorization, tracking who did what to which invoice and when? Simply answering auditors questions…
Add into this mix how long is spent simply filing information within the department, or broader company if you have a dedicated department for this (reference two).
Why? By simply automating the capture and workflow processes every single time element of this process is removed.
Invoices, statements etc. are all date and time stamped on receipt, metadata tracks every step that the invoices take, who touches them what they do or write.
All of this information is stored with an electronic version of the invoice which can be received through very easy to use “google-like” search tools.
The best bit? When someone (an external auditor?) wants to see the invoice and know what was done, keep it simple, give them a temporary log in and let them look for themselves. You can spend that time doing something far more pleasant. Coffee?
Improved Metrics & Analytics for Business Insights.
This one should not really come as a surprise. Machines are not only more accurate at “inputting” data, but they are faster, have no down time and won’t burn out.
However, what people may not be considering is that with more and more AI being implemented into business processes, the volume and quality of your data becomes vital.
AI is reliant on data in order to drive forward real benefits. How can senior management make decisions about cash flow, cash allocation or budgets if they cannot see the complete picture? How can AI make suggestions if the data it is fed is of poor quality?
Now, just within AP, how long is spent filling in daily or weekly reports, manually copying information into an Excel form? Manually manipulating this data to give the insights you need?
How many invoices can you process? Per person? Per hour? Can you prove that?
Which suppliers cause the most delays, and why? Can you provide evidence of that?
No doubt there are a myriad of other questions and issues you regularly have to deal with. But why should you spend time pulling this information back out from multiple systems, or spreadsheets?
With DataViz tools, you have access to all of the data that has been collected by your systems. Better yet, you can start with some simple dashboards focusing on key metrics and then dig down deeper with simple clicks of your mouse.
This allows you to follow your own intuition and thought processes, not be restrained by a lack of data.
Managed Process Flows for Approvals.
Do you still need to send invoices for approval after they have been receipted?
Are these digital images? Attached to an internal email? Or maybe they are simply pieces of paper being sent around via internal post.
How often are you having to remind the other person that they need to authorise the invoice, or retrospectively create a PO? Then to find out they were on holiday for 2 weeks, they deleted the email…
How many phone calls and emails, or time spent at other people’s desks does this actually use up?
Yes, you guessed it, you don’t need to be doing this.
Very simple workflow and escalation tools have been available for years, often they are included within ERP software.
Now, this can be further sped up by using AI to decide where to route an invoice based on some simple rules, avoiding the 2 week holiday issues, for example.
Add into this invoices that require multiple levels of sign off. Why wait for these to happen one after the other? Surely these notifications and reminders could all be sent at the same time?
Can AP Automation Save Time?
I have looked at four examples here where automation tools can save not only AP teams, but the wider business significant amounts of time.
Time that can be spend on cost beneficial tasks, not costly tasks.
No doubt, you will be able to expand on this enormously, as let’s face it, unless you have the absolute latest in automation tools, there will still be gaps that you could address. Gaps that, possibly, only you are aware of.