The accounts payable process can be a time consuming and labor intensive process. Invoices arrive on a daily basis, some be email and some by postal service. The accounts payable staff generally have a daily routine which involves a few things:
Once the supplier invoices are organized and invoices that require approval are then distributed to the approvers for review, approval and assignment to the ledger. The approval process comes with it's own set of challenges:
If procurement is issuing Purchase Orders, then any incoming invoices that reference an issued purchase order will have a PO number on it. The invoices with PO numbers will need to be matched against the actual Purchase Order to ensure there are no discrepancy with the pricing or items ordered.
In order to process invoices for payment the AP Staff are required to enter invoices into the financial system in order to issues the payment to the supplier. The process of entering invoices requires the AP Staff to manually key all of the relevant details on each and every invoice into the financial system. Not only is this a very slow process, this isn't make very good use of the AP Staff's time.
The traditional approach to processing accounts payable invoices relies heavily on people and manual processes. With advent of Accounts Payable Workflow it made it easier to automatically route invoices to approvers using electronic workflow queues. Now lets take that a step further as Accounts Payable Automation leverages both invoice workflow and automated PO invoice matching and by combining both of these with integration to the financial system the ability exists to completely eliminate the need to manually enter or key invoices for payment processing.
Month-end close is critical to an organization’s financial health and performance. The ability to know your financial status accurately and consistently – including expected purchase costs, cash flow, and outstanding liabilities – will determine your profit/loss and inform key business decisions. Accounts Payable (AP) plays an integral role in the process.
Root causes of inefficient manual paper-based month-end processing.
Lack of Visibility.
Tracking current progress into financial close and accounts payable processes is essential for every organization. Without real-time updates, finance and accounting leaders may find it difficult to navigate the status of essential close tasks and AP transactions.
The more manual your tasks are, the more susceptible those tasks are to errors. Relying on human intervention for tasks that can be easily automated not only burdens accountants to repetitively track transactions and reconcile them, but it also increases the potential for violating compliance regulations.
Financial data affects the entire organization. Accounts payable teams must manually upload invoices and transactional updates into ERP systems, while accounting teams are dependent on the general ledger information when performing reconciliations to ensure their internal controls are being met. Without a standardized and automated process in place, F&A teams may find difficulty in achieving comprehensive compliance.
How AP Automation helps.
Closes are faster.
An automated AP system enables invoices to flow into the organization quickly and automatically, so all transactions are accounted for, even up to the last minute, without requiring AP to manually key anything in. This enables Accounting to know what is really going on at any point in time, and it can use that real-time info to close faster.
Visibility across all invoices enables the AP and Accounting departments to see which invoices have been received, which need to be approved and where they are in the process. Outstanding liabilities are no longer a guessing game, but rather are accurately captured by the system. A centralized invoice receiving process and automated routing capabilities mitigate the problem of lost invoices and, more importantly, the need to hunt for them before routing them to approvers.
Better fraud prevention.
The ability to detect anomalies, which is enhanced by AI capabilities, machine learning, data validation and enforcement of business rules, helps to prevent fraud.
Manual data entry inevitably results in human error. With electronic data capture technology, you get over 99% accuracy on every invoice. Plus, the automation system flags any suspicious invoices for manual review. That lets you catch potential problems and take care of them early on.
Real-time reporting and data analysis
With financial automation software, users are able to view real-time dashboards that display vital information regarding the status of a financial report. With access to real-time data, a business can make decisions based on factual data at any time without waiting for the end of the month to have access to accurate data.
Vision360 Enterprise is an AP Automation platform intended to assist in streamlining all aspects of accounts payable invoice processing. For more information consider attending one of our information webinars or contact us directly and we'll be happy to answer any questions.
Today's CFO faces never ending pressures to grow revenues, ensure financial controls and reduce operational costs across the enterprise. This is no easy task for any CFO, who has to deal with things like economic uncertainty, increased regulatory requirements and increased scrutiny from investors.
CFO's have a few diverse and challenging roles, Steward, Operator, Strategist and Catalyst. The traditional role require CFO's to preserve the assets of the organization by minimizing risk and getting the books right and running a tight finance operation that is efficient and effective.
It's increasingly important for CFO's to be strategists, helping to shape the overall strategy and direction, instilling a financial approach and mindset throughout the organization to help all parts of the business to perform at a high level.
As Strategist, CFO's help influence the future direction of the company by taking a seat at the strategy planning table. CFO's are vital in providing financial leadership and aligning business needs and financial strategies to grow the business.
As Catalyst, CFO's can drive the execution of change within an organization. CFO's are in a position that allows them to drive business improvement initiatives such as enterprise process improvements, cost reductions, and innovations that add value to the business and affect the bottomline.
As Operator, CFO's have to operate an effective and efficient finance team that provide many different financial functions to the organization such as treasury, tax, sales, planning, analysis, accounts receivable and accounts payable.
As Steward, CFO's work to protect the vital assets of the company, ensure compliance with financial regulations, close the books accurately and communicate value and risks to investors and boards.
With all of the challenges faced by today's CFO how can Accounts Payable Automation help? By leveraging current AP Automation technologies, finance departments operate at a much higher efficiency level, with lower overall operational costs than those finance teams relying on manual processes.
The CFO can now be assured that financial rules, policies and procedures are being enforced by the AP Automation technology. This ensures that proper protections are in place, segregation of duties are enforced and compliance requirements are met.
Since today's AP Automation solutions provide an extremely high-level of efficiency gains, finance departments are no longer burdened by time-consuming, error-prone, manual tasks and can now focus on financial tasks that will help CFO's to manage cash flow, monitor liabilities and make more effective business decision regarding the future growth and bottomline of the company.
Vision360 Enterprise, by BlueCreek Software is one of the fastest growing AP Automation solution providers on the market. Our services and solutions are trusted by iconic brands like Welch’s and Yankee Candle and across all types of industries from manufacturing and retail to healthcare and high-tech. For more information about Vision360 Enterprise or any of our services and solutions please visit our website at www.Vision360Enterprise.com or contact us directly 603-437-1400.
With all Finance has to get done in a given day sometimes it’s hard to find the time to step back and track how efficient and effectively your department is running. Finance deals in numbers all day. But how often are you generating numbers to find out how efficient your finance team is?
But benchmarking is more critical than ever. By monitoring your functions’ performance you can determine where you can streamline, boost efficiency (and possibly cash flow) and incentivize staffers to do an even better job.
So what are the best metrics out there? Here are a few to get you started. How many of them are you currently using … and how many more could you be?
The last thing you want is for people to think you’re trying to “catch them” doing something wrong in their jobs. Better to position metrics as a way to raise the bar and a springboard to figure out what needs to most attention.
Please share any additional metrics you are using today!
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.
In a recent study by the Institute of Financial Operations (IFO) on Accounts Payable Automation, over 95% of the respondents said they still receive paper invoices in the mail. It is 2015, it is time for your company to improve the way you company processes incoming invoices.
By now you have probably heard that Accounts Payable (AP) processing isn’t as efficient as it should be. You probably have heard the risks of misplacing invoices, not paying them on time, the time it takes employees to file and retrieve these invoices or documents, and much more. You are more than aware that AP automation will give you the efficiency, cost controls, visibility, and accuracy of information that your industry demands to be successful.
Our ERP System Can Do That - While your ERP or accounting system might have an accounts receivable module, they notoriously lack the functionality, control, insight, and automation required to support the accounts receivable management process. ERP simply were not built for accounts receivable mangement; some of the major issues with managing A/R in your ERP module include their inability to handle disputes and dispute resolution, the need for additional dependent modules, the lack of sophisticated reporting, the need for outside applications and spreadsheets to fill functional gaps, their inability to automatically update account information, and extreme process and workflow inefficiencies.
We Don’t Need Automation – Do you want to save time and money and realize fast ROIs? AP automation allows organizations to get on top of their invoice management agenda, providing solutions with unrivaled ease-of-use, flexibility and powerful matching capabilities. Automated AP solutions provide increased productivity, reduced processing costs, improved process transparency and minimized errors and fraud. Other benefits include multi-channel interaction, rapid ROIs, touchless processing and easy scaling. Solutions cover the full invoice management process from capture through validation, process management, archiving and reporting. Rather than spending time on redundant tasks like data entry, filing, sorting, copying, etc. employees can concentrate their efforts on work more directly related to your bottom line.
Automation Doesn’t Really Save Money – The cost to manually process an invoice can range from anywhere between $5 – $25, and with strategic automation, this cost can be reduced to an average of $2.50! High costs include those associated with the errors of manual data entry, invoices getting lost while they are routed from one individual/department to another, exceptions processing, accrural delays, failed audits and duplicate invoices. Automation provides a 90 – 95% reduction in paperwork which leads to a 25% increase in labor productivity.
We’ll Lose Control - Automation actually provides greater visibility, allowing authorized users to see invoice status at any time. Invoices are no longer left unattended, and employees are held accountable for their role in the approval process. This in turn leads to greater control since processes are automatically updated as invoices make their way through workflows, providing more time for focus on exception handling.
We Can’t Afford Automation – Actually, you can’t afford not to have AP automation. With the right solution in place, you’ll save time and money currently spent on manual processes while avoiding things like double payments and forgotten invoices. And, with cloud-based solutions, there is no upfront software purchase required and no dedicated IT team to be put into place. Using this type of solution enables organizations to realize faster ROIs by basing return on documents processed rather than viewing it as a project.
We’re Too Small For Automation – No matter what the size of an organization, there are employees assigned the task of manually entering invoice data when they could be focusing on more strategic responsibilities. Just like with larger businesses, there is money to be saved through the implementation of an accounts payable workflow, including lost invoices and failed audits. And with the use of cloud-based solutions, costs are minimized with solutions available to fit any budget.
We’re Too Big For Automation – AP automation solutions were actually first designed with larger organizations in mind, so they are able to handle large volumes of invoices. With the abiity to create effective workflows and integrate with existing ERP systems, automation is a no brainer for the larger business that has many more departments and employees for a single invoice to pass through. There is a greater chance for error with a manual system used in a big business since there is a higher number of invoices and more people handling them. Automation takes manual procedures out of the mix allowing for increased control and visibility.
We Don’t Have Time to Implement Automation – There are many AP automation solutions to choose from, many of which require no dedicated IT teams or special training. You can decide whether to outsource, insource or use a combination of both. Any time spent on implementation will be quickly regained through rapid ROIs.
About Vision360 Enterprise: With Vision360 Enterprise there is nothing to purchase, no software licensing restrictions, no annual software maintenance and very little IT resources needed. Vision360 Enterprise automates the routine steps involved in approving invoices. Once supplier invoices are captured, the invoices can be routed to approvers based on business rules, through multiple levels of approvals, coded and released for payment.
The benefits of integrating Vision360 Enterprise accounts payable processing with MS Dynamics:
- Seamless integration reduces the need for technical resources
- Allows for rapid deployment
- Accounts payable dashboard provides 100% visibility to supplier invoices
- Eliminates 100% of paper invoices
- Captures email invoices electronically
- Eliminates the need for data entry
- Powerful coding tools
- Perform 2 & 3-way matching
- Data validation engines ensures accuracy
- Centralized processing and controls
- Complete audit trail of approval activity
- Generate instant efficiency reports
- Instantly access invoices from electronic archive
- Enforces your security, processing rules and compliance
We do not take a one size fits all approach to any engagement. Our strength is in our ability to objectively evaluate the business problems and challenges that affect every day. By leveraging our business process solutions experience, coupled with our technical expertise we are able to effectively analyze and recommend a variety of viable solutions to fit the needs of any business problem and challenge we are faced with.
For more information contact us or call 603-437-1400 x308
1. Invoice Processing Costs:
What's your cost to process a single supplier invoice?
There are many factors that affect the cost to process a single supplier invoice. Many of these costs are attributed to the "clerical duties" performed by skilled accounting staff. These clerical duties include opening incoming mail, sorting and staging invoices into batches, sending paper invoices to approvers for proper coding and approval, performing manual data entry of key invoice data into the accounting system for payment processing.
Many studies have been performed by trade associations i.e. Paystream Advisors, Aberdeen Group, The Accounts Payable Network, IOFM and many more. The statistics have shown that the average cost to process a single invoice is roughly $15 dollars and companies with significant accounts payable processing challenges have seen their costs in the range of $38.00 per invoice. Organizations that have implemented some level of accounts payable process improvement have realized a significant savings of 60-80% over manual invoice processing with per invoice costs reduced to $3 dollars or less per invoice.
2. Invoice Processing Speeds:
How long does it take for your supplier invoices to process through your organization for payment?
The time it takes can greatly vary depending on the number of manual steps an invoice needs to go through for proper approvals, matching, coding and entry into your accounting system. According to the "Aberdeen Group" the average processing time to process invoices manually is between 24 - 30 days, while companies that have implemented some level of accounts payable process improvement have seen their processing times reduced down to 5 days or less.
3. Productivity Per Team Member:
Are your accounts payable team members equally productive?
Take the number of accounts payable invoices per month and divide by the number of invoices processed. You should also factor in the tasks performed by each team member. It is estimated that 75% of the labor and time associated with processing supplier invoices is performed by the accounts payable department.
Measure the time it takes to process an invoice today and you can be assured that accounts payable automation will double the throughput and significantly reduce the costs to process an invoice.
4. Variance Analysis/Correction Rates:
Variances can be caused by many factors, however the time it takes to correct them can cost your company more than 10 times the costs to process a single invoice correctly!
Are line items coded correctly? Are manual keying errors causing bottlenecks? Are you able to report on variances in a timely manner? With accounts payable automation rules can be put in place to correctly process invoices and flag those invoice with issues and route them for resolution and instantly report on any variance or processing issues.
5. PO Matching Process and Speeds:
The process to manually match an invoice and the time it takes can vary dramatically between organizations, processes and definitely between people. Let's face it - some people are just faster than others and some accuracy varies.
With accounts payable automation business processing rules can be applied to "automatically match" invoices against your purchase order, receiver, vendor master or any other criteria. When applying these "auto-matching rules" invoices can be "automatically coded" to eliminate the need for manual data entry, hence eliminating the "fat finger" problem.
6. Invoice Entry:
Invoice entry largely relies on skilled accounts payable staff to take the time to enter by hand the information from a supplier invoice into the companies accounting system. As you might expect manual data entry is "error-prone" and relies on people.
With accounts payable automation the data captured during the routing, matching, coding and approval of invoices is transferred into the accounting system, "error-free".
With Vision360 Enterprise accounts payable departments can expect to eliminate all of the manual touch points and process associated with process, paying and maintaining supplier invoices. With Vision360 Enterprise there is nothing to purchase, no software licensing restrictions, no annual software maintenance and very little IT resources needed. Vision360 Enterprise automates the routine steps involved in approving invoices. Once supplier invoices are captured, the invoices can be routed to approvers based on business rules, through multiple levels of approvals, coded and released for payment.
Many organizations are challenged by wanting to break free from slow and costly paper based systems. Accounts Payable departments are constantly being challenged to cut operating costs whilst ensuring invoices are paid promptly. Manual AP processes are costing companies on average $15.00 per invoice; that’s a staggering on-going cost for a company who may be thinking they are managing the invoice paper flow!
A typical manual AP process includes:
Invoices coming into the company from different suppliers or cost centers in different layouts and delivery formats – USPS mail, email, pdf, fax and more.
Supplier invoices are forwarded to the relevant person responsible for that invoice.
There is a longer lead time due to manual routing, processing and sign off procedures.
Inefficiencies due to time spent matching the invoice to the purchase order, verifying, approving and signing off for payment.
Inability to maximize discount benefits associated with early payments.
If it exceeds the company’s limited amount it may well have to go to senior management for a 2nd or 3rd level approval.
If approved the invoice is then manually input into the accounting system and made ready for payment.
Paid invoices are then filed away in file cabinets and boxes for archiving.
Archive costs for compliance and accounts audits.
Typically, there may well be invoice queries for a variety of reasons, is the vendor valid, is the invoice correct and does it match the PO or is it a duplicate invoice, accountants need invoice copies, auditors request copies and many more. www.bluecreeksoftware.com
Why automate the accounts payable process?
1. To give complete processing control to the accounts payable department.
2. By automating the accounts payable process you gain complete visibility of the accounts payable function using an end-to-end invoice management system of all processes and, any financial implications.
3. Capturing the invoice information at the point of receipt eliminates the need for manual data entry.
4. Automatically consolidate and reconcile purchase orders, invoices, payments which helps manage allocations, cash flow and payments.
5. Invoice processing automatically matches and verifies scanned invoices with purchase orders.
6. The process is centralized so up to date live information is made available to the accounts payable team at every stage of the AP process.
How does adopting an AP strategy reduce my paper flow?
It’s the start toward adopting an e-invoicing strategy for your organization by automating the processing of invoices and choosing to integrate a straight-forward workflow and document management software with your existing systems to remove manual and repetitive workloads. Using a centralized accounts payable process that’s integrated into your current system provides:
-Automatic allocation of the right invoice to the relevant transaction
-Automatically post invoices for payment
-Automatically queue exceptions for handling
-Deliver information on exceptions to the AP desktop
-Make payment status available to everyone instantly
What are the major benefits?
1. Reduce invoice processing costs
2. Eliminate manual data entry
3. Significant time savings
4. Exceptions resolved quickly
5. Supplier conflict resolution
6. Early payment discounts
7. Reduced supplier inquiries
8. End duplicate payments
9. Realize a significant savings in 6 – 9 months
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. - See more at: http://www.bluecreeksoftware.com/#sthash.c7F4iwKr.dpuf
Vision360 Enterprise Accounts Payable Automation Solution by BlueCreek Software reduces time wasted chasing down paper invoices by automating invoice approvals, eliminating manual data entry, eliminating paper invoices and reducing processing costs.