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The process of evaluating accounts payable automation solutions can be a daunting and very confusing task with all the options and possibilities.

Let's face it, accounts payable automation is not a new concept and has been around for years now. Once upon a time this type of solution was for the big boys, but today companies of all shapes and sizes can realize a significant benefit and reduction in accounts payable. 

If you're interested in the cost of accounts payable automation to decide if this is even doable for your organization or need a quote to satisfy your purchasing requirements then consider using our "SELF-SERVICE" quoting system.

Let's face it, processing supplier invoices can be a daunting task and in some cases a smaller accounts payable department can feel the "invoice processing pain" simply due to a lack of resources more so than larger companies who may be drowning in shear volume of invoices. Either way the steps of processing, routing, matching, approving, coding, entering and paying invoices is error-prone, labor intensive and in-efficient. So what do you do if upper management isn't onboard with accounts payable process improvements or invoice automation?

Here are a few ways that being organized and following standard processes can help.

1. Don't pay from invoice copies.  This can lead to duplicate AP transactions and payments. If you have to pay from a copy, be sure to check your records for the same invoice number and dollar amount.

2. Make sure you have a W-9 on file BEFORE paying a vendor. This will save a lot of hassle at year-end when you need to prepare 1099s.  Fines for not complying with 1099 reporting can be hefty and the rules change from time to time. 

3.  Have rules about how invoice numbers are formatted and entered.  If accounts payable team members are all using their own rules about entering invoice numbers (like what to do with leading zeros), it will be difficult to track down anything.  Also, make sure you have a policy for invoices that don't have invoice numbers on them.

4.  Segregation of duties! The person entering the invoice should be different from the person approving the invoice who should be different from the person signing the check.

5.  Centralized receipt of supplier invoices. Okay, so this is easier said than done however, having all invoices come to the accounting department first before being sent out for approval(s).  This way the invoice can be logged before it enters the black hole.

6. Enter invoices one at a time. Do not enter invoices as a batch.  Each one should be entered individually in order to have an audit trail.

7.  Coding of invoices. All invoices should have the G/L account coding written on them as well as any notes about special handling.

8.  The amount of the invoice should be entered as billed even if you don’t plan on paying the full amount.  A credit memo can be entered and matched against the invoice later.  The key is to remember the audit trail.

9.  Have a new vendor welcome letter that you can send informing them of where invoices should be sent, what information you require to process their invoices (like a vendor ID number) and any forms you need completed.  Vendors will appreciate the information to ensure their payments aren’t held up.

10.  Watch your payables carefully to take advantage of any discounts being offered by vendors.  It can add up to a nice sum by the end of the year.

11. Setup your vendor files alphabetically and file your paid invoice as soon as completed. 

There are many more ways to ensure a smooth accounts payable process if upper management won't go for process improvement. Feel free to list your own ideas that may help others looking for ways to make their accounts payable process better.

A typical day in accounts payable is anything BUT typical. A day in accounts payable should really be called, Mission Impossible! Why you ask? The accounts payable department and responsibilities of the AP staff go well beyond paying bills.

A few of these tasks include opening mail, sorting invoices, matching, getting approvals, coding, entering invoices, check runs, answering calls, filing paper, dealing with closes and audits.  With everything that's going on in an accounts payable department its no wonder that keeping track of invoices can be a challenge and chasing down invoice for approval can even be more of a headache.

Here are 3 ways email reminders can help make life better and keep your payable process on track.

1. Email alerts let approvers know when NEW invoices arrive that require review and approval. The approver simply opens the email and clicks a link within the email. The link then brings them to the invoice or invoices that requires their attention.

2. Email alerts can also notify and escalate invoices that have gone untouched for a predetermined amount of time to manager for approval. Example, an invoice arrived from a supplier that offers a 5% discount if the invoice is paid with 10 days. Unfortunately, the approver had been out on vacation and didn't see the first email alert. So an email notification and automatic escalation sent the invoice promptly to a next level manager that was able to approve the invoice and take advantage of the 5% supplier discount.

3. Email alerts eliminate the need for accounts payable staff to waste valuable time chasing down invoices only to hear that the approver never received a copy or that they sent it to accounts payable and AP lost the invoice. With email alerts and escalations gone are the days of the "blame game" where accounts payable is caught in the middle.

By utilizing email alerts as part of a comprehensive accounts payable process improvements initiative departments can expect to realize a significant level of improvement, reduction in manual steps and peace of mind.

Vision360 Enterprise helps companies of any size to improve their accounts payable process. Whether you have one accounts payable clerk to a full shared service center, entry level or global enterprise, Vision360 will help you reduce and eliminate the manual processes associated with receiving, routing, coding, approving and entering invoices.

Vision360 Enterprise will save you time, labor and increase efficiencies across your organization.

We all know how important it is to keep customers happy. Don’t meet their needs or make them mad and they may leave you. Even worse, their comments may cause others to leave with them. Just like customers, you also need to keep vendors happy. If you don’t you may find your credit line cutoff and that you cannot get essential products and services. Imagine what happens when you cannot get the product you need to sell or use in your manufacturing process.

Pretty soon it impacts your company’s ability to satisfy customers. The accounts payable days analysis is a statistic you can calculate that indicates how good of a job you are doing managing accounts payable and keeping your vendors happy.

Days payable outstanding (DPO), defined also as days purchase outstanding, indicates how many days on average a company pay off its accounts payable during an accounting period.

Days payable outstanding means the activity ratio that measures how well a business is managing its accounts payable. The lower the ratio, the quicker the business pays its liabilities. It also shows the average payment terms granted to a company by its suppliers. The higher the ratio, the better credit terms a company gets from its suppliers. From a company’s prospective, an increase in DPO is an improvement and a decrease is of course, "not good for business and cash flow".

Value is a two-way street. Of course, vendors want to provide their clients with the best possible return on their investment. But they're a business, too. If a client makes a project difficult to staff, hard to schedule and costly to execute, more likely than not it will affect the initiative's outcome and value negatively.

On the flip side, though, there are clients, even very large ones, that help vendors get through their internal processes, bureaucracy and political hurdles. Clients that smooth the way for vendor teams internally are going to get a superior value from their investment in our services. Effort will be spent on the work the vendor was hired to do, not on jumping through hoops. The vendor staffs up, their people get to work and they are able to focus – which always results in better quality and value at the end of the day.

Once negotiations are closed, vendors want to shift their focus from winning the business to meeting the goals and expectations of their client. Yet they sometimes encounter major delays, bureaucratic hurdles and work stoppages based on internal processes and politics. This only hurts the client's project, yet it is often caused by the client organization's own internal structure and approach to management.

So. Look at your vendor management processes. Would you want to work with you? Are you making your vendors happy? Do they have a fast-track, once you've signed with them? Or do they have to navigate a complex system of approvals and oversight? Are your schedules in alignment with theirs? Do your internal teams understand what's going on, who's involved and what the goals are? How many levels of management do they encounter? Do they have a point-of-contact with authority?

Vendors usually expect to navigate these processes with every client. Even giant companies with hugely complex internal systems and challenging politics can get great value from their vendors by providing them with the tools and management resources they need from the start. As businesses invest millions into their technologies, and vendors do more and more of the work, any organization that engages with technology vendors on key initiatives risks a great deal by failing to be good to work with.