Recently I was asked by a customer what they can do right now as they wait to kick off an automation project. It forced me to think about examples of challenges that clients have faced and how they took those challenges head on as they prepared for implementing accounts payable (AP) automation.
Some companies are taking this time to lean in to automation projects with newer technologies that learn on their own. Others are struggling with the manual processing of AP invoices remotely, with some still having to run into their office several times a week to collect and process their paper invoices. But unfortunately, not all businesses are able to move ahead right now with their dream AP solution. If that’s your story, this blog is for you.
Best Practices for AP Prior to Automation
If your business isn’t quite in a place where kicking off an automation project is possible, here are some useful tips and strategies to help you prepare for a successful implementation in the meantime.
- Centralize any decentralized processes when you can: Are there shared services centers that must be considered? If so, do this first and then look to automate.
- Consider workflow logic: Streamline, standardize and document the workflow on each process.
- Think about who, outside of the specific workflow, will need visibility to invoices during and after processing (e.g., auditors, managers, data analysts, etc.).
- Have your non-PO approval process documented/mapped out. Typically it’s tribal knowledge or scattered throughout Excel spreadsheets, sticky notes, etc. Now is the time to get it documented!
- For PO-based invoices, involve purchasing in the process. The quality of the POs being written/created in the ERP directly coincides with the invoice reconciliation process. The better they are written, the better they will match.
- Consider inbound channels: How are invoices received? Are those inbound channels used for other things too? Optimize/choose electronic delivery when possible and makes sense.
- Think about how invoices are being received and managed: Do all invoices across company codes come into one email address or to different email addresses?
- Are your vendors sending multiple invoice attachments per email, multiple invoices in a single attachment, or one email and one invoice?
- Dispute resolution: Map out scenarios thoroughly. What makes sense to automate? What doesn’t? Is there another way?
- Reporting: Measure and calculate important KPIs and determine what is needed for the future
- Accruals: How are they done today?
- Time from invoice submission to the posting of invoice: How are you measuring that today?
- What is the target of success in this project with respect to the above items?
- What’s the PO/non-PO invoice ratio? (rough measure: current state, targeted state)
- Cleaning up your master data (vendor, PO information, etc.) is critically important not only for the production environment, but the quality assurance (QA) environment as well. Having good data in QA can make a big difference in how well the testing goes.
- Prepare a report indicating your vendors that will be included in the future process, including: volume of PO invoices and volume of non-PO invoices per year, a report sorted by the top vendors by volume, and another report sorted by dollar amount paid to the vendor. This helps determine the value of features during the project cycle.
- Have an Esker-to-ERP integration project plan and the ERP data integration/ERP developer resources necessary to integrate Esker with your ERP. This is something you could begin researching and preparing prior to kicking off with Esker.
- Communicate the changes to come to your teams, and enlist main stakeholders from various areas to help socialize future changes. User acceptance drives success in all projects!
- Prepare your entire organization: Once you’ve documented your approval process, alert everyone that you’re preparing to automate this process.
- Have the right team members in place for the project. This would include your technical (IT and ERP) as well as Super Users for key roles (AP specialist, reviewer/approver, buyer). Don’t forget about the other roles within your organization that will be impacted (auditors, managers, data analysts, etc.)
- Inform key users that they will be testing and working within the system a nontrivial amount of time during the project implementation. Generally, giving these users dedicated time to the project proves invaluable to the project’s success.
There are several strategies that companies are employing to cope with the business impact of having to wait to deploy an automation project (e.g., protecting cash flow margin, investing in greater efficiencies, etc.). Is now the time for an informal audit of your processes? Can you identify opportunities for improvement, including strategic vision one to five years out? Anything noted can help propel your business case for AP automation, even if it’s for the future!