AP invoice automation
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Easier month & year-end closing with AP data you already own

Whether we’re ready or not, 2017 is drawing to a close, and with it comes the inevitable year-end closing process. This falls on top of the month-end closing process, something that may or may not already be a laborious task for the AP staff, stacking ever higher the workload of requests from all ends of the business.

But there is good news – these closing processes can be a whole lot easier. How? Keep reading to find out.

Choosing the right solution for a successful means to an end

Let’s get to the meat of why you’re reading this blog post – how can AP automation make AP the way it should be – pain free and touchless wherever possible? It’s actually quite simple; it all breaks down to access, accuracy, and forecasting.  

The right AP solution gives you access to the data you need in a single, easy to use, cloud-based system. It’s important that we add in “cloud-based” to this description, as modern businesses extend beyond the office desk. In an ever-increasing mobile workplace, employees are on-the-go and need the access to real-time data from any location.  

The accuracy of the data your employees are accessing is also important. It needs to reflect any updates to numbers in real-time, so that leaders can rest assured, knowing they have the latest and greatest figures to make informed decisions for the benefit of the business.  

And of course, that leads to forecasting for the future. A robust AP automation tool should easily give you the visibility of all liabilities and cash flow so there aren’t any nasty surprises at month-end and year-end closing.  

How to mine invoice data for gold?

Earlier in this blog post, we mentioned the data you already own. What we were referencing was the powerful data housed in your AP process – data that goes beyond supplier names, companies, costs, due dates, etc.    

The true value of your AP invoice data is in collecting it and converting that raw data into meaningful reports. Trouble is, it’s most likely buried in the manual and paper-based processes of your AP invoice workflow. You may even have some level of automation existing already within your AP, but if the systems are not robust enough, or if there’s still some level of manual processes, getting accurate visibility can still be quite painful to do.  

The key is investing in the right tool to transform the data you already own into something valuable. One key requirement of the tool you invest in is that is must get rid of paper invoices. When you have a process with paper invoices, the valuable data on those pieces of paper gets shuffled into desk drawers and filing cabinets, not in a system where you can get a good idea of the company’s financial picture.  

However, having all of this information at hand only matters if you can consolidate and present the data in a way that adds value to the organization. Can the tool you’re considering for AP automation provide you with data-driven dashboards for a clear view of business intelligence? If not, we caution you to consider a more robust tool.  

Providing relevant data to the right stakeholders

For those of you reading this who work in accounts payable, you already know that you get frequent requests from different people in the organization asking you for information on a daily basis. This includes information such as the status of a specific invoice, a summary of outstanding invoices for a specific cost center or supplier, or a list of all invoices received but not yet processed and paid. Without a good system in place this will be both painful and time consuming.  

AP team

For AP, consolidated reports on outstanding invoices will remove painful chasing and investigating during the month end closing periods. If process improvement is important to your organization, bottleneck reports will help the AP team identify where in the process invoices are getting stuck and which approvers are in need of reminders or training initiatives. In addition, process efficiency data allows AP managers to measure and monitor the AP function’s performance on a number of efficiency KPIs such as touchless ratio, automatic distribution rate and processing lead time. This way, they can identify issues in the process and apply improvements to increase automation and speed up the processing time. These KPIs can also be used in a way to demonstrate the accounts payable function’s performance to the rest of the organization.  

CFO

Traditionally the CFO and Finance team use data from the ERP to report on financial metrics. For this reason, it’s very important that the AP automation solution has a solid integration to the ERP system. But it’s also important to note that the AP automation solution can provide up to date invoice data that is not yet available in the ERP, and that will help business leaders get the full picture of the company’s liabilities. It can also provide visibility of early payment discount opportunities that can generate significant savings for the organization. The right AP automation solution will enable you to provide your CFO with accurate data to support accrual reporting, cash flow forecasts, financial audits, and discount opportunities.  

Procurement

When it comes to providing data for procurement, spend visibility is key, and that include POs for direct and indirect spend. Procurement deals with after-the-fact liabilities in the form of expense invoices that need approval. However, there are solutions in place to shift those to a pre-approved model whereby purchase requisitions lead to the generation of purchase orders for indirect spend, allowing for control and visibility. In terms of contract performance, procurement can also look to their AP solution to see what stage of payment their existing contracts are in, and the proportion of spend per contract.  

Budget holders

Managers who are responsible for a budget line or cost center may play an important role in the processing of supplier invoices but often lack visibility of the overall AP process. Their role handling invoice approvals and deviation management – often the steps of the AP process that delay the total processing lead time – are usually not prioritized tasks and often end up at the bottom of their to-do list. It’s worth a mention that a modern AP automation solution can help managers complete their part of the AP process more efficiently and faster with, for example, a user friendly mobile tool and simplified deviation management functionality. In addition, since all invoices are collected in a digital tool budget holders can easily search for supplier invoices to retrieve payment status and pull consolidated reports to gain visibility into outstanding invoices and actual spend per cost center.  

With all of that being said, it should be pretty clear that the data in AP extends to almost every part of the organization. However, without the modern reporting made capable by an AP workflow automation tool, AP will likely never reach the full potential of business intelligence and spend visibility brought about by harnessing the data in their process.  

I encourage you to watch our webinar on this topic including a demo that will show you how MediusFlow’s next generation reporting tool can give you full access to and visibility over your AP data, thereby benefiting the entirety of your organization. Webinar: Transform your AP from back-office to business intelligence hub

Mattias Johansson

Mattias Johansson

VP Professional Services

mattias.johansson@medius-group.com
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