4 Steps to Touch-free AP Processing

It wasn’t supposed to be this way.

For years, accounts payable (AP) leaders pined for the days when invoices would flow through their department and post directly to their ERP, with little or no intervention required by AP staff.

AP automation solutions and invoice processing software would make it all possible.

While 77 percent of AP departments now have deployed some type of AP automation solution¹ – scanning software, optical character recognition (OCR), a supplier portal, or something else – most AP departments are still manually handling most of the invoices they receive from suppliers².

It’s not uncommon for a single invoice to be handled five or more times before it is approved for payment. In addition, many AP departments exacerbate the problem by paying their suppliers with paper checks, which require staff to print, stuff, mail checks, and manually reconcile bank statements.

Why AP is so labor-intensive

Every manual task in the accounts payable cycle results in higher costs, more opportunities for errors, a greater chance of delays and lost invoices, and less visibility into where things stand in the process.

Automation isn’t to blame for all these manual tasks. Instead, the fault lies with the piecemeal approach most AP departments have taken to automate their invoice processing and supplier payments.

When processing invoices and paying suppliers, AP departments big and small rely on an assortment of point solutions and closed-loop networks, each with its logins and passwords, user authentication, file formats, and proprietary integrations. Manual intervention and data silos abound. As a result, the typical AP practitioner spends 84 percent of their typical workday on manual, repetitive tasks such as keying data, shuffling paper, and chasing down information.

Manual tasks undermine the entire accounts payable cycle:

• Supplier registration and onboarding
• Invoice receipt
• Data capture
• Invoice approval and exceptions resolution
• Supplier payments
• Audit and reporting
• Supplier management

Manual tasks leave little time for higher-value activities that help drive business growth – things like analyzing data, collaborating with stakeholders, and building relationships with strategic suppliers.

Now is the time to rethink the way your AP department operates and its underlying cost structure.

Make touch-free AP a reality

Escaping the manual invoice processing and supplier payments trap requires a new approach to automation. And the best way to do that is by automating the receipt-to-pay cycle from end to end.

End-to-end AP solutions digitize, automate, integrate, and accelerate invoice processing and supplier payments to eliminate manual intervention. Here’s how the technology accomplishes that:

• Digital receipt. All paper and electronic invoices are aggregated onto a single platform (including those sent by mail, e-mail, fax, electronic data interchange), eliminating the need to maintain multiple standalone systems for each way that suppliers submit invoices.
• Intelligent capture. Artificial intelligence (AI)-driven technologies extract all header and line-item data from invoices based on pre-configured business rules, including invoice data, invoice amount, supplier name, remittance address, product quantity and price, and sales tax information. Extracted data is then matched against purchase order and proof-of-delivery information residing in the ERP. Matched invoices can be automatically posted to the appropriate general ledger account without any intervention. Automating the capture and validation of data removes the most labor-intensive parts of the invoice approval process.
• Dynamic workflows. Unmatched invoices or invoices requiring approval (e.g., high-dollar invoices, invoices from strategic suppliers, invoices from new suppliers) are digitally routed according to pre-set rules. There is no need to determine who the appropriate approver is. And there is no chance that supplier invoices will be misrouted or become lost. Recipients are notified of invoices awaiting their review and alerted when an invoice is approaching its due date. Invoices can even be approved via a mobile device when purchasers are at home or on the go. Rules also can be configured to escalate invoices awaiting approval to a manager to prevent missed deadlines. Digital workflows are an efficient alternative to tracking down approvers, physically routing invoices, having to follow-up with approvers who haven’t acted upon an invoice, or engaging in back-and-forth e-mails and calls to resolve exceptions.
• Electronic payment. Approved invoices can be paid in the supplier’s preferred method (e.g., check, Automated Clearing House, virtual card, wire transfer), according to their payment terms, all from a single system. Built-in tools facilitate early payment discounts. And payments are reconciled in real-time without the need for staff to maintain spreadsheets.

With an end-to-end solution, AP staff only intervene when necessary.

If your AP staff is spending too much of their time on manual tasks, ActiveWorx wants to speak with you. Let us show you how our end-to-end solution can eliminate efficiencies across your AP cycle.