If it’s taking your AP department longer to approve invoices, you are not alone.
The prolonged shift to a remote work environment is slowing things down for many AP departments across the invoice-to-pay process. Almost half of AP leaders surveyed by the Institute of Finance and Management (IOFM) say that receiving invoices is more difficult now that staff work from home. Twenty-four percent of AP leaders say that remote working has made it harder to approve invoices. And resolving invoice exceptions is trickier for more than one-third of AP departments.
The root of the problem is that most AP departments don’t have the technology they need to process invoices in a remote working environment. An eye-popping 91 percent of AP leaders admit that they aren’t satisfied with the flexibility of their AP processes to meet changing business requirements, according to a survey conducted by SharedServices Link. Slow approval processes result in backlogs of invoices awaiting approvals, late payment penalties, missed opportunities to capture early payment discounts, more phone calls and e-mails from frustrated or angry suppliers inquiring about the status of invoices and payments, cash forecasting challenges, and potential supply chain disruption.
Routing invoices via e-mail isn’t helping matters for AP departments. E-mail routing doesn’t provide business rules to ensure that invoices are sent to the right individual, it’s easy for e-mailed invoices to be misrouted or deleted without anyone taking acting on them, AP managers don’t have visibility into the status of e-mailed invoices, e-mailed invoices can languish in the in-box of a recipient who is out of the office, and an e-mail may not provide access to supporting information.
Approving Invoices Lightning Fast with Automation
With no telling when, or if, staff will be returning to the office, AP leaders must find ways to speed invoice approvals, regardless of whether approvers are in the office, at home, or on the go.
Automation provides the fast and frictionless approvals that AP departments need.
- Digital capture enables AP departments to aggregate invoices sent via e-mail, File Transfer Protocol (FTP) upload, a supplier portal, or fax, without anyone having to go to the office. The header and line-item data from invoices are captured, validated, and matched against purchase order and proof-of-delivery information residing in an ERP. And matched invoices are effortlessly posted to the ERP, without the need for any human operator intervention.
- Dynamic workflows digitally route unmatched invoices or invoices requiring approval, based on pre-configured business rules (e.g., high-dollar invoices, strategic suppliers). Digital workflows eliminate the possibility of lost or misrouted invoices. Notifications, alerts, and escalation procedures prevent invoices from becoming “stuck” in the process. And mobile capabilities enable purchasers to approve invoices from anywhere, at any time.
- Electronic collaboration enables AP staff to collect the information they need to resolve invoice exceptions, without relying on back-and-forth phone calls and e-mails. AP staff, internal stakeholders, and suppliers can collaborate to get to the bottom of things. And an online portal allows suppliers to instantly see the status of invoices and payments, 24/7/365.
- Real-time reporting puts smart operational insights at the fingertips of AP leaders. Graphical dashboards show where every invoice stands in the process so AP leaders can act fast on potential issues. Drill-down capabilities help AP leaders identify the source of bottlenecks. Historical data allows for the tracking of metrics over time. Mobile reporting helps AP leaders keep processes flowing when they are not in the office. Ad hoc reporting makes it easy to uncover opportunities for operational improvement. And information on posted invoices can be instantly retrieved by simply entering keywords or other data.
These are the reasons that highly automated AP departments spend less than one-fourth the time to approve invoices, compared to their peers with less automation. If the shift to remote working has made it more difficult for your AP department to approve invoices, automation may be the answer.
Watch our video, “How Automation Accelerates Invoice Approvals.”
Ready to learn more about how you can make your invoice approval process faster?