In many AP departments, there is a curtain that AP managers sometime ignore. Behind it are last-minute phone calls, faxed updates, and then scanning those faxes into the system. That’s three different types of input handled by one or more people within the division. This indicates that perhaps something isn’t working in your automated process. Here are two signs your AP process really isn’t automated.
ERP Systems are Not AP Automation
First, Enterprise Resource Planning (ERP) is NOT AP automation. ERP is great for a broad, financial overview, but it is not designed to capture specific transactions. Companies that provide software to replace or update data tracking for the Budget or HR departments (billable hours for example) may also provide an accounts payable solution, but it must be tailored to accept and process invoices from suppliers, and then pay the bills through E-invoicing.
With this in mind, when items begin to reveal themselves they will need immediate attention! This may be difficult outside of true automation. For most ERP software, only limited mobile apps if any may be available. On what should be rare occasions for payment approval, alerts need to be addressed by management immediately through a secure connection to their personal or work-issued devices. Even those should be automated, with only the minimum personnel needed to resolve the issue receiving the alert, to prevent slowing down approval.
Second, a decentralized business can still use and needs central processing. Unless a branch location has full authority to process its invoices, each one is required to send them to the organizations AP department for review and payment. If there is a paper in the process, then no payments can be issued until the mail arrives or the FAX machines spit out a copy.
Even if the suppliers send out e-invoices, someone at the branch location still must forward the attachment in an email. Then an AP manager must open, approve, and then issue a payment order. Either method grinds automation to a halt. Whether it is minutes, hours, or days depends on how fast personnel at both ends respond.
If AP departments can recognize and deal with these situations they can reap the benefits. AP automation, when truly automated, can pay suppliers quickly and save the company an incredible amount of money annually. Every AP manager needs to pursue real AP Automation to better not just their revenue, but their future of their AP process as well.