AP invoice automation
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3 Life Hacks for Accounts Payable

The effects of a manual or broken accounts payable process extend beyond lengthy invoice approvals and delayed vendor payments. In fact, it affects many parts of the organization making the day-to-day work life painful in so many ways.

The good news is you can change this situation for the better. Continue reading below for 3 accounts payable life hacks that will make your day-to-day so much better.

Typical pains from a broken AP process

Before we dive into the life hacks, it’s important to understand how the different roles within the organization are affected by a broken accounts payable process.

Accounts Payable (AP)’s suffering is much more than just resource heavy, manual tasks. More importantly, without a digital and automated process, they lack visibility of the process and struggle to gather the data they need to close the books – every month.

CFO’s typically experience that they are delivering a less-than-great service towards the organization and that the invoice process is perceived as a problem. In addition, the lack of visibility of the invoice process brings issues with overall control, cash forecasting and audits.

Budget holders feel the pain of having to be on site to approve invoices, alternatively approving ad-hoc emails with invoices attached. There’s no trace or trail and no way to look into previous invoices or get a summary view of actual spend.  

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Life hack #1: Own your numbers

When your AP process is supported by a modern AP Automation tool, you will experience a number of quick wins. These will happen almost regardless of which solution you chose to support your process and should be considered the very basics of AP invoice automation success.

Since you will have all invoices currently in the workflow tracked by a system, the information you need to complete the month close procedure will be available in ready-to-use reports at a click of a button. This alone is a huge time saver for AP and Finance.

Cash forecasting will be improved by the ability to foresee upcoming payments even for invoices that are currently in process and not yet in your ERP system.

Pre-packaged audit reports ensure professional and painless audit processes, be it audits of finance and accounting or IT audits such as SOX compliance.  

Life hack #2: Don’t do it!

The most efficient way to perform a task is not doing it

The above quote – which is a statement that we live and breathe at Medius – means that if something can be done automatically, then you should automate it rather than spend resources on performing the same task over and over again.

But, when something must be done manually, it needs to be efficient and, when possible, enjoyable.

For too long, IT systems have been painfully unfriendly to users and have sometimes even made life harder rather than easier for the people executing the process – the very same people that the system is supposed to support.

Map out your own process. Which steps could be automated and fully handled by your AP solution? Which steps will still need human intervention? How can you make this task as easy and smooth as possible? Today, nearly every step of the AP process can be automated so I’m sure that you will find improvement opportunities that will make your life easier.

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Life hack #3: Dig in to the details for ultimate control

If you’re really looking to improve your life, you should go beyond the first (baby) steps of AP invoice automation such as e-invoicing and transferring manual tasks into a digital workflow.

The devil is in the details” – this is particularly true for your AP process. If you want to “exorcise” the evils in your process, you need to understand exactly what happens at each step. Small changes of your automation configuration can make a big difference for you and the rest of the organization.

Here are a couple examples of the level of detail you need to look into when you are striving for true touchless processing.

Line level matching

Invoices are not just dates and company names. The real content of invoices is in the invoice lines. Because of this, whatever solution you choose to engage with needs to be exceptionally competent in automated line-level matching.

Handling of exception types

Exceptions are costs that appear on the invoices but were not ordered by you. Common examples include packaging cost, freight/pallet cost, overtime etc. Your AP solution should be able to completely automate the coding, handling and approval of these types of costs as well so that no human being needs to be involved.

Configurable tolerances

The key to automation is to use technology that can automate even the imperfect invoices. It’s common to have deviations on price or item information. If your system cannot deal with such common deviations without requiring human interaction, you will not reach a high level of automation. Instead, only large deviations, outside of tolerance levels, should be presented to staff for decision making.

A “no excuses” solution

Do not offer your approvers any excuse to not approve invoices in a timely manner. A state of the art mobile web app requires no installation and no training and is guaranteed to put a smile on the faces of your executives and budget holders as they review and approve their invoices with ease.  

A framework for improvement that really works

At Medius we have established a framework for improvement using relevant benchmarks, self-assessment and iteration. And it’s not just something we talk about in fancy marketing brochures, it really works for actual companies experiencing tangible improvements. These are just a few examples:

  • Bohus, a Norwegian home improvement retailer, managed to increase their touchless invoice processing rate from 60% to 92% after having iterated the MediusFlow improvement method over a duration of 6 months.
  • Retail chain Lagerhaus experienced a below average touchless rate of 30%. After a DIY enablement workshop with the MediusFlow customer success team and continuous self-assessments they have been able to reach 80% touchless processing in just a few months.
  • US-based Quaker Chemicals had reached a stable, but relatively low, touchless rate around 45%. A single call from the MediusFlow customer success team with tips on where to look for “low hanging fruit” improvements resulted in an impressive lift to 65% touchless ratio.  

 

Get started assessing and improving your accounts payable process.
Download this whitepaper: The modern AP manager’s automation toolbox

Daniel Saraste

Daniel Saraste

VP Product Management

daniel.saraste@medius-group.com