Best Practices in Accounts Payable Processing

Posted by Shaun Joseph on April 21st, 2021

As these issues continue to progress, the case for accounts payable automation becomes stronger. By automating paper-intensive processing, AP departments are able to optimize the invoice approval and payment process. One of the innovative ways organizations are achieving this automation is by utilizing imaging and workflow solutions.

With a typical imaging and workflow solution, AP staffs are able to view invoices images as part of an automatic routing system. Everything from the receipt of an invoice and approval to vendor payment is documented in the system. The process begins when a vendor invoice is received. The paper-based invoices and related documentation are converted into images which can then be accessed by authorized users. The invoices are automatically routed using defined notifications and conditions to support the business process. This automated, step-by-step processing of AP invoices is the most effective way to keep the flow of documents steadily moving.

By eliminating the physical movement of paper-based documents, the time spent trying to find files is dramatically reduced, leading to increased employee productivity. The system enables customized internal controls to be created for each business process, resulting in immediate access to documents, faster approval time and reduced cycle time.

There are numerous benefits associated with the use of imaging and workflow in terms of helping AP departments increase efficiencies. The workflow management solution offers a significant reduction of costs, stronger internal controls, and the overall streamlining of the AP invoice review and approval process. In addition, the automated internal controls and instant access to documents eliminates the chance of misplacing or losing paper, duplicating or overpaying invoices, or making late payments.

Another important benefit of a comprehensive workflow management solution is that it allows numerous members of a company to securely collaborate in real time. Since the documents are stored in a centralized repository, other personnel can be given instant access as well, cutting copying, shipping, and faxing costs. The improved electronic audit trails can also be extremely valuable, especially during audit reviews.

AP invoice processing can actually be transformed into a "zero touch" environment with the right imaging and workflow automation solution. This means that AP is able to enter the paperless world everyone dreams about - no one in the department has to touch paper.

In order to create a "zero touch" process, vendors are directed by the AP department to remit all invoices to a central Post Office Box location, which is received by the service provider. The provider's staff then prep, scan and index all invoices each day, capturing important data elements such as point of contact, vendor name, invoice number and more.

As soon as the invoice enters the system, the internal controls set up by the AP department go into action. An automated e-mail notification is sent to each approver informing the person that an invoice is awaiting review. The point of contact then has several options such as approving the invoice, routing it to another approver, declining, or pending invoices for later approval.

Once an invoice is approved, it is routed to a higher approval level or to accounts payable for a final review. Invoice data is then transferred through EDI into the organization's accounting system and payments are scheduled.

An imaging and workflow solution provided in a Software-as-a-Service model can be configured to provide notification of duplicate invoices, route invoices above a certain amount to particular staff, create and maintain approval timers, and perform workload balancing. Invoice coding is tracked in Web-based workflow forms and cross-checked and validated against accounting system tables.

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