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A Checklist of Steps to Improve AP Processes

For organizations and AP departments that may not be ready to take on an entire process automation initiative all at once, there are discrete steps to go from manual, paper-driven to digital, fully automated operations

May 09, 2017
A Checklist of Steps to Improve AP Processes - Artsyl

For organizations and AP departments that may not be ready to take on an entire process automation initiative all at once, there are discrete steps to go from manual, paper-driven to digital, fully automated operations. Best of all, each step on that journey may quickly reap its own rewards, demonstrating a quick payback and making the business case for further process improvement.

Here is a quick overview of the first steps in the journey for AP departments who want to elevate their operations and achieve greater efficiency and control.

Step 1: Go Digital

Going paperless when it comes to AP invoices does NOT mean that your organization has to stop accepting paper invoices from your vendors. Certainly, taking the necessary steps to make it easier for vendors to submit payments electronically can go along way to lighten the burden of paper invoices.

HOWEVER, the process of digitizing your AP process can include accepting paper invoices along with digital submissions by scanning and converting them into digital documents and data automatically.

Intelligent capture software can go a long way to transforming BOTH scanned paper and digital documents into the information you need to automate your AP process. Solutions like docAlpha from Artsyl Technologies can accept invoices from multiple channels including scanned paper, PDF/Word documents submitted via email/Web portal/FTP/eFax and automatically identify relevant data like Vendor contact details, invoice items, line item details, etc. When integrated with ERP or other business systems, they can actually validate the data they gather by cross-checking with those systems-AND check for potential duplicates.

Step 2: Automate routing/Approval

With data readily available from scanned paper and native digital invoices (not to mention from orders and receipts), your organization has the information necessary to eliminate the second-most common bottleneck in the procure-to-pay process-approval routing.

Automated solutions like InvoiceAction from Artsyl Technologies leverage data gathered from documents to determine who invoices should be routed to for approval. Integration with your ERP system allows these solutions to simplify and streamline G/L coding as part of the process, so approvers have the necessary information at their fingertips. Automated workflow solutions for AP can automatically determine who an invoice needs to go to for approval based on criteria like dollar amount or department, including managing multiple tiers of approvals.

For PO-based invoices, these solutions can automatically match quotes/orders/invoices/receipts and create payables transactions within the ERP system. As part of the process, they can identify exceptions to be flagged and managed according to business rules.

Best of all, these systems can target process bottlenecks, sending out automatic reminders and alerts to ensure that approvals are handled on time. They can even adjust/adapt workflows when approvers are traveling, on vacation or unavailable for some reason.

Step 3: Optimize Cash flow and Early Pay Discounts

You’ve tackled bottlenecks and potential sources of error and risk by automating the handling of documents, entry or data and routing of invoices for approval. NOW, you have enough control over the entire process to generate added cost savings from early pay discounts while keeping a handle on cash flow.

At this stage, AP departments can take a closer look at their vendor relationships and payment terms and arrive at agreements that best serve your vendors and your organization.

Dynamic discounting is a perfect example of this. Dynamic discounts provide a range of early payment discounts (or late payment penalties). With systems in place that eliminate payment processing as a hurdle from paying early—plus better more timely data about G/L accruals and cash flow—AP managers can make informed decisions about how to maximize discounts while maintaining cash flow.

Step 4: Onward and Upward

With a firm handle on your AP processes, your organization should have the proper tools in place to continue to examine and improve the process—or to adapt to business changes. Whether your company grows organically or expands through mergers/acquisitions, your systems and processes will be able to scale and adapt.

At the same time, if executed properly, your AP automation initiative may become a showcase for how other operations (back office or front office) may be streamlined and improved for greater positive business impact.

Take the Next Step

For more information about how to get started on your AP automation journey, contact your Artsyl Technologies representative and request a demonstration of the docAlpha Smart Process Platform and our InvoiceAction AP automation solution.