Reduce manual efforts: If your invoices need to be manually added into your system that is a big red flag. Data entry is not an enjoyable job for most employees, and you are gated by the human effort involved. For many companies the end of the calendar year and their busiest financial time coincide. This is not a great position for the company or the employee to be in. Run late with AP or have employees not taking time off for the holidays. Automate manual processes and build more flexibility into your system.
Better approvals: How does your organization deal with approvals? It could be based on signing authority, location, products, size of order, PO match, and/or a mix of all these things. Then you need to factor in what approvals need to be signed off on, by who, or if the system can do it automatically. As an example, if you have an invoice for under $1000, from a known supplier, and with the right PO details. That invoice could be automatically approved. Other invoices could be sent digitally to the right contacts in a timely manner with details back to the AP on open approvals.
Working with your systems: Improvements in accounts payable process should also be linked to your ERP/financial systems. Information should be able to flow into your systems without unnecessary manual intervention. Moving the manual process farther down the line does not improve the system.
Visibility: Incoming paper-based invoices or PDFs can sit in a digital or physical invoice. This is valuable information your organization can use for cash flow planning or managing projects. Invoices can go into this black hole. Processing the invoices doesn’t mean you need to pay faster, but it does give your team visibility.
Dealing with suppliers: The supply chain has been significantly impacted by Covid-19. There has never been a better time to be on good terms with your suppliers. There are accounts payable processes that can be improved to strengthen this relationship. Give them visibility on how things are progressing on your side. They want to know when they are getting paid and if there are any challenges. If there is an issue with an invoice, deal with it quickly, versus closer to the due date which will often lengthen the time it takes for them to get paid. Happy suppliers are part of a good long term strategy.
What are you missing: Recent PYMNTS research shows that businesses that handle high invoice volumes take an average of 11.6 days between the moment an invoice is received to the moment it is paid. Does that seem like a little or a lot to your organization? If you have a quick pay of 7 days, you are missing out. By reducing the time it takes to process you can take advantage of the financial benefits based on your cash flow. We have talked to many clients that want to use quick pay, but they can’t process the invoices fast enough.
If you would like to talk about how OnePosting can improve your accounts payable process book a meeting with us.