Account payable’s repetitive, time-consuming tasks can be streamlined by removing paper, electronically capturing the documents, converting them into images, analyzing their content, and creating workflows to automatically route for review and action.
When it comes to accounts payable (AP), most organizations receive invoices from a number of digital channels (mail, fax, email, electronic data interchange - EDI, etc.), but the overwhelming majority of them are paper documents.
Regardless of how invoices are received, a typical accounts payable process follows a series of steps: capture the invoice, manually key in the data, code the invoice against purchase orders or general ledger (GL) accounts, route for approval, and issue payments.
The problem is that when you’re shouldering an unrelenting workload and having to wrestle manual processes, you and users are prone to making errors (specifically during data entry). With manual AP processes, invoices slip through the cracks, early payment discounts are missed, and long-term storage and retention are lacking.
Unfortunately, these aren’t issues that you can solve by hiring more people – that wouldn’t be feasible or sustainable.
But there is a solution: Process Automation.
Process Automation
By using document management software (sometimes also discussed in the context of enterprise content management –ECM – technology) core business processes can be streamlined and automated.
AP departments can work smarter by relying on automated capture, imaging, and workflow technologies. Account payable’s repetitive, time-consuming tasks can be streamlined by removing paper, electronically capturing the documents, converting them into images, analyzing their content, and creating workflows to automatically route for review and action.
And no need to worry about policies, state laws, and regulatory requirements, an ECM system will manage the appropriate retention and keep the associated records in compliance.
Steps in Automated Accounts Payable
You already know what an AP process looks like manually, but you want to understand how the process works once it’s been automated.
Here are the steps in an automated accounts payable process:
1. Capture and Import:The process begins by capturing paper invoice documents by scanning them into the ECM system via a scanner (either a dedicated scanner or a copier – sometimes even your smartphone) and document imaging software. Capture software can automatically import electronic invoices.
2. Purchase Order Information:Once the invoices are in the ECM system, all the information associated with the PO and the vendor is transferred and integrated to the document’s metadata. Now a user will quickly have all the information they need at their fingertips when they open an invoice in the system.
3. Route:From the ECM system, the invoices will automatically be routed by email to the department head for approval where they can either approve or deny.
4. Approve or Deny:After the invoice has been routed, if the department head denies the invoice, the requester will receive the invoice with an explanation for the denial. However, if the department head approves the invoice it will then be emailed on to the controller for approval.
If the controller denies the invoice then the system sends the invoice back to the department where it is corrected and resubmitted. But, if the controller approves the invoice then – through integration – payment is authorized and information is transferred to the ECM system.
5. Save and Assign:Once the ECM system has the payment information, it is able to automatically save the paid invoices and assign the retention period to the invoice based on your company’s records management schedule.
Stop wrestling a manual accounts payable process – automate it and steal some of your valuable time back.
Want to know more about how an automated AP process work can work for your company? Let us know – we can answer your questions.
