Recognising the Symptoms – Signs your AP Workflows could be improved

AP staff are often the unsung heroes of an organisation.  Processing invoices is often a thank-less and underappreciated task. AP personnel can sometimes lack the internal prestige of being a frontline ‘earner’ while still being expected to perform their duties not just well, but faultlessly.  After all, mistakes in AP mean mistakes in cash.  It’s a job that no-one notices when everything is going right, but when something goes wrong it’s the AP staff that catch a lot of the blame. 

We deal with a lot of AP departments in our work and continue to be surprised with how dated most AP processes are. It seems that organisations implemented software solutions for bookkeeping last century and the initial AP processes from that change are mostly still in play today. So why is that? Well, often these administrative Rockstar’s are simply too busy to take a step back and take a look at the whole process from start to finish so process improvement comes slowly if in fact it comes at all.

Therein lies the dilemma.  If you don’t have time to review a process, how do you know whether it needs to be improved…?  AP Automation is becoming an in increasingly popular topic of conversation and the benefits realised by these projects are becoming familiar success stories to many people.  But how do you know if it’s worth the time for your business to investigate this?   The answer is simple.  You start by looking for symptoms.  Here are a few symptoms you can look for in your organisation which could be tell-tale signs you need take look at your AP workflows.

Printing Invoices
If the first step in your process is to print an invoice so it can be routed, coded, and approved then there are massive benefits to be gained by looking at workflow automation.  The days of manually stamping or stickering a physical document and breaking open new packets of highlighter pens and post-it notes are well and truly over.  There is no need for an invoice to go on a physical journey through your offices, moving from desk to desk while collecting signatures.  These steps can be replicated electronically so that they happen faster, they eliminate the cost of printing, and the steps are auditable and reportable.  On a similar note the same can be said for Purchase Orders.  If you still have physical PO books that carbon copy in triplicate then your process doesn’t just need to an annual check-up, it needs to visit the emergency room.

Lack of Visibility
At any given moment and for any invoice, do you have the ability to find out exactly where it is in the process?
Right now, could you easily tell how many AP Invoices you have received that are pending sign off or approval from other people?
Do you know your free cash needs into the future?
If you can’t find this information, then can you really say that you have control over the money that is leaving your business or that is needed to pay your suppliers?

A lack of visibility and/or an unnecessarily complex process could also crack the door open for not just errors but also for potential fraud or insolvent trading.  Automation forces compliance with your internal rules and ensures that nothing goes unnoticed.

Taking Work Home
When your AP staff are taking work home to finish in the evenings or if they are giving up part of their weekends to meet deadlines then there is a problem that can’t be ignored.   This may not be a sign that the workload is too much or that its grown too quickly, but rather it could be a sign that the process takes too long to complete.  It not necessarily a problem solved by hiring a temp or recruiting another team member because at an individual transaction level nothing will have actually changed and the pothole will have just moved a bit further up the road.  The problem could be one that is solved with workflow automation and improvements by minimising the manual data entry, automatically doing the validation checks, and avoiding the double handling and re-keying of information.   Speed doesn’t have to be the enemy of efficiency.

Lack of Time
It seems that everyone is time-poor these days, but when it comes to payment deadlines a business can’t afford to be lax.  Some suppliers offer discounts for early payment and some penalise for late payments.  Is your business maximising the benefit of the former and avoiding the latter?  Even if there is no financial incentive or disincentive for prompt payment, if you don’t get those invoices processed fast enough then the supplier will just re-send them.  This will result in more time spent on the one transaction because you will be double processing.

How much time are your AP teams spending on the phone with suppliers chasing pricing errors, querying invoices that have no PO number, or clarifying duplicate invoices?  Some organisations have an AP team member dedicated to a single supplier for just this reason.  These validations can be done automatically so that your AP staff have the time to do much higher value work such as developing beneficial relationships with your suppliers rather than constantly chasing issues.

If the lead time for your AP Invoice payments is too long then you have a process that is leaking efficiency and has become a hidden cost for your business.

Month end is a nightmare
Its happens every month and every financial year end.  We all know it’s coming so why is it so painful for so many businesses?  Granted there are some tasks that can only happen at month end, however AP invoices shouldn’t send people into mad scramble to finish before you rip the page off the calendar.  A frantic month end is sign that you have a significant peak & trough cycle in your AP workload.  Having AP Automation can help you understand why that happens and how it can be avoided or at least smoothed out over the course of the month.

Happy staff are generally productive staff so avoiding a monthly cycle of stress can only be beneficial for everyone.  If you hear your AP staff say something like “I can’t because its month end” then alarm bells should be going off that prompt you to have a closer look at why they are saying that.

These are just 5 quick and easy symptoms to identify and are by no means an exhaustive list.  If you see any of them in your business then perhaps it’s time to consider an AP Automation project. 

If you would like to understand how we can help you and your organisation please contact us to arrange an initial meeting.

Kris Elliott
Solution Sales Executive

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