AP invoice automation
Invoice matching

Share

So you think you're automated?

The conversation flows at finance trade shows and events almost always turns, at some point, to automation. Artificial Intelligence, machine learning, robotic process automation – and dozens of other terminologies get sprinkled into conversations left and right.

The rise in automation technology over the last 10 years has also helped propagate many misconceptions, some of which could be more dangerous than you’d think. Overestimating your level of true automation could be sabotaging your day-to-day productivity and business potential. 

Take accounts payable for example. Invoice processing automation or “AP automation” has been on the business agenda for more than a decade. However, many organizations have yet to discover truly automated – touchless – invoice processing since they may be stuck with a first-generation solution with partly manual and paper-based processes that limit the success of automation.

The easiest way to assess your level of true automation is to compare your invoice processing capabilities to a handful of best-practice approaches for both expense (non-purchase order based) invoices and PO-based invoices.

So, you think you’ve automated your AP workflow for expense invoices?

Expense invoices tend to be the trickiest to automate. They’re harder to track with less of a “paper trail” within the ERP or AP process. Yet there are a number of ways to significantly speed up the routing, approval, and deviation management for these invoices, such as:

Coding templates. Templates take a lot of the guesswork out of coding expense invoices based on supplier, project number, contact person or other invoice automation. A truly touchless invoice process can automatically detect key information on the invoice to select the right template and apply it to the invoice.

Automatic distribution. Your AP solution should enable you to automate the distribution of invoices for review and approval based on your organization’s approval hierarchy. It should be easily configurable to fit your company’s structure and policies, including approval amount limits. Most importantly, you should be able to measure the percentage of expense invoices that are automatically distributed and consistently aim to reach above 50% of all expense invoices handled in this way.

Match to payment plan. You can automatically match recurring invoices, such as for office space rent, leasing or contractors, to payment plans in the supplier contract and, in doing so, skip all of the previous steps so you can enjoy a fully touchless process.

7-day (or less) processing lead time. All of the previous automation is combined with an intuitive mobile solution, so your team can easily and quickly approve invoices, whether they're at their desks or on the go. The assigned approver can receive an email notification when there are invoices requiring attention and with one simple click, the approver can readily review and approve them.

So, you think you’ve automated matching of PO invoices?

Touchless processing. Much like with the volume of expense invoices being automatically distributed, you want to be able to accurately measure and track how many of your PO-based invoices are managed through a fully automated – touchless – process, with no intervention whatsoever. As a benchmark, aim to have 65% or more of your direct spend managed in this manner. 

PO connection. Even for PO-based invoices that cannot be processed in a touchless workflow, you should aim to have at least 70% of your direct spend automatically connected to the corresponding purchase order, or multiple purchase orders depending on the situation.

Dynamic matching. Your automation tool supports matching of invoice data against a purchase order, goods receipt note or contract. It enables truly flexible matching at different line levels, depending on the amount and type of data available, and allows you to configure tolerance levels to automatically approve acceptable or expected fees, such as freight, according to your business rules. 

Deviation management. As soon as your AP automation tool identifies a potential deviation outside of your configured tolerances, the responsible person within your organization automatically receives an alert. Rather than painstakingly going through an invoice line-by-line, your approver sees only the specific information in need of review and can easily take action, whether they are at the office or on-the-go.

Now what?

It’s incredible how much of a difference there is between what some term as “fully automated” and the truly touchless invoice processing described above. If, while reading through this guide, you noticed gaps in your own capabilities, we encourage you to seek a second opinion on how you can improve your existing process to reach the automation levels of the best-in-class.

Do you need help improving your automation level in these areas? MediusFlow is an AP automation solution that automate and simplify the entire accounts payable process, enabling an unprecedented level of truly touchless invoice processing, shortened lead times, greater control, and improved visibility of financial metrics.

Download our convenient checklist to accurately gauge the automation levels of your AP process.