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Even with the great strides achieved in digital imaging and technology, many accounts payable departments still spend a great portion of their time chasing paper. It’s amazing that even among organizations using the most sophisticated ERP systems, AP staff still often print and manually process invoices. In fact, more than 70% of companies process and pay half of their invoices on paper. If this is the picture in your payables department, here are some proven ways to help identify and end the paper chase.

Identify What Paper You’re Actually Chasing

Traditional accounts payable processes are full of paper, including: 

  • Requisitions and purchase orders
  • Packing slips 
  • Invoices
  • Error reports
  • Reconciliation reports
  • Audit reports
  • Checks

Once you identify all that paper flowing in, through and around your AP department, the “chase” becomes more apparent. 

Paper Processing Problems

To look at the paper problem another way, consider if any of these situations sound familiar:

  • A vendor calls to check on the status of payment for an invoice. You’re not sure where the invoice is. It might be on an approver’s desk. It might be held up somewhere due to an inquiry. Or, it could have slipped off someone’s desk, in which case you have a bigger problem on your hands.
  • The percent of invoices that are entered into the system the same day they’re received is low.
  • The number of early payment discounts you get each month is decreasing.
  • You have an audit on the horizon and you’re scrambling to gather all the documentation that’s required. In the meantime, normal daily operations are slowing, further extending the turnaround time to get new invoices paid and increasing late payment fees.
  • The manager who approves the bulk of your invoices is on a business trip for the next week, and your AP process has come to a grinding halt.
  • The manager approving an invoice thinks it is higher than it should be. Now, someone in accounts payable must scramble to find the documentation for the last payment and the contract.

Paper processing causes headaches for everyone. Accounts payable staff get buried in the paperwork, vendors get frustrated, and the people who must approve invoices are stuck shuffling the paperwork required.

Enter Automation

Once you determine what the issues are, it’s time to find out where the paper is, in what order it is processed and with whom, and what the expected outcome is. You’re now a leap forward on the path to automating your invoice-through-payment process.  And, it’s a smarter path, as many organizations find that an automated system will reduce their costs by up to 80 percent. 

With the move to automation, your AP invoices are entered automatically into electronic format. Manual data entry is basically eliminated, along with its susceptibility to human error. Once in digital format, invoice data can then be intelligently recognized by the system, and based upon this data, invoices launch through the right approval routing while also communicating with your ERP.

Depending on the solution you employ, automation can extend right to payables ERP posting and payment processing.

The Expanding Role of Accounts Payable

By streamlining the entire invoice-to-payment process, you can enjoy the end of the chase and your payables department can contribute to the health of your company in ways that go far beyond simply paying invoices. You can focus on developing stronger vendor relations, establishing an environment of spend optimization and identifying even more opportunities to reduce costs.

Are you ready to take your accounts payable to a new level? The experts at ACOM are prepared to help you ensure your AP department is running at peak efficiency. Call us at 800-699-5758, or contact us online.