It will be hard for accounts payable leaders to achieve incremental process improvements unless they digitize the way their department receives, approves and posts invoices when staff work remotely.
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Only seven percent of accounts payable leaders who attended a recent Institute of Finance and Management (IOFM) webinar sponsored by IPS describe their department as being fully automated, where invoices can be posted directly to an enterprise resource planning (ERP) application with no operator intervention. In fact, 14 percent of accounts payable leaders admitted that their department is completely manual, and 28 percent said their department is only partially automated. Receiving, approving, and posting supplier invoices in these environments requires lots of manual intervention.
Among accounts payable departments that have deployed invoice processing software, only 22 percent use optical character recognition (OCR). Fewer departments have deployed a supplier portal (16 percent), digital workflows (15 percent), analytics (4 percent), or a digital mailroom (3 percent).
The problem with manual invoice processing
Without digital technologies such as OCR, ML, AI and RPA supporting remote working can be a big challenge.
Thirty-one percent of the accounts payable leaders who attended the IPS webinar said their biggest remote working challenge is too many invoice exceptions. Similarly, 23 percent of attendees said their invoice approvals are taking too long. The paper-centric processes that most accounts payable departments used to approve invoices and chase down information to resolve exceptions were not designed for a remote work environment. A spike in supplier inquiries (15 percent), poor operator productivity (8 percent), inadequate visibility (8 percent), and sky-high invoice processing costs (3 percent) are other challenges that payable leaders are experiencing as their staff Work from Home.
Many accounts payable departments have tried to address the challenges of remote working by leaning hard on e-mail to route invoices for approval. But e-mail routing of invoices may create more challenges than it solves. Unlike accounts payable automation solutions, e-mails don’t provide chain of custody or separation of duties assurance, don’t include escalation procedures, don’t provide tracking of the status of invoices, don’t offer comprehensive audit trails or logging of actions taken on an invoice, and don’t prevent supplier invoices from being deleted ahead of retention schedules.
Some accounts payable departments are trying to track invoices using their enterprise resource planning (ERP) application. But the workflows built into most ERP platforms are rigid and by the time a supplier invoice reaches an ERP it can be too late for an accounts payable manager to act.
Other departments require a “skeleton crew” to go into the office to open mail and scan invoices for routing via email. A few payables departments drive paper invoices around town for approval.
It’s arguable whether any of these workarounds really work.
How to process invoices when staff work remotely
Automated accounts payable solutions keep processes moving, no matter where staff work.
- A digital mailroom aggregates all paper and electronic invoices, including those sent via e-mail, submitted through a portal, or uploaded to a File Transfer Protocol (FTP) landing page.
- Optical character recognition (OCR), Machine Learning (ML), Artificial Intelligence (AI) and Robotic Process Automation (RPA) and other data capture technologies extract and validate line-item detail and other data from invoices, eliminating the need for manual data entry.
- Invoices are automatically matched against purchase orders and proof-of-delivery documents.
- Unmatched invoices or invoices that require approval are digitally routed to the appropriate person, regardless of whether they work across town or across the globe. Alerts, notifications and escalation procedures prevent invoices from becoming stuck and graphical dashboards enable accounts payable managers to always know where invoices stand in the process.
- Mobile functionality allows for anytime, anywhere approval of invoices.
- Approved invoices are seamlessly uploaded to an ERP or accounting system without keying.
- Reporting and analytics enable accounts payable managers to track operator productivity.
- A self-service online portal enables suppliers to provide onboarding information, submit invoices and receive acknowledgement, and check on the status of invoices and payments.
With no telling when staff will return to the office, these are the capabilities AP departments need.
Why automate accounts payable
More accounts payable leaders recognize the value of automation when staff work from home.
Forty percent of the accounts payable leaders who attended the IPS webinar plan to upgrade or refresh their legacy invoice processing technology. One-third of accounts payable leaders said their department is planning to automate its process for receiving, approving and posting supplier invoices.
If your accounts payable department is looking for ways to improve its remote working environment, IPS wants to speak with you. Our accounts payable automation software digitizes and simplifies invoice processing, no matter where staff work.
Let’s chat about your invoice processing needs!