I recently attended a presentation related to how Accounts Payable Departments might utilize social networks. This really got my attention since we at OpenText have long considered social networks as a means to enhance sharing of information ranging from individual contributions through departmental actions to corporate messaging. Open Text provides a tool “Pulse” as part of our ECM solution to assist with information sharing.
By using Pulse, organizations can take advantage of a Facebook-like social media environment within their existing Open Text ECM Suite deployments and move informal communications out of email, thus dramatically reducing dependence on inefficient and slow email chains. Additionally, it offers a way for people to collaborate rapidly in real time, while creating a secure knowledge base for new employees and team members. Pulse is a major step toward enabling customers to capture their organizational memory through the archival of formal and informal user conversations.
So…how can those in the business process around Invoice Processing utilize social networks? While I believe the use is unlimited, I will focus on a few examples.
Individual Information Sharing or what would an Accounts Payable Professional want others to know. By using tools like Facebook, Twitter, Pulse, etc an individual can inform others when they will be out of the office or they may want to share recently achieved Professional certifications. They may want to inform a group such as selected suppliers of upcoming requirement changes. Information might be shared with internal clients on payment activities.
Departmental Information Sharing – The department may want to share internal statistics such as on time payments and discounts earned. They can recognize those process participants that helped to achieve new success with invoice processing. The department may want to announce staffing changes such as retirement, promotions or transfers. They may want to create groups for selected participants such as procurement so they can immediately address resolutions being handled with SAP Invoice Management. For me, I am now able to know if one of my colleagues is traveling to the same event that I may be attending. I can also see when colleagues are on vacation…live vicariously through their adventures…makes my work day a little more pleasant.
Corporate Information Sharing – Your shared service center may want to utilize social networks to introduce policy changes to both internal and external clients. As with the Department, they may want to announce staffing changes. They may desire to communicate real time with internal Accounting Departments related to closing activities such as accruals. The use of the OpenText Pulse would be a great tool to increase the visibility of current policies and regulations. I for one monitor real time changes to travel budgets as well as new presentations that others may have saved to the content server. I don’t have to wait and hope I receive an email telling me about new presentations.
Let me know…how are you using social networks to improve your corporate contribution?
For more information on SAP Invoice Management http://ecohub.sdn.sap.com/irj/ecohub/solutions/SAPVIM
For more information on OpenText Pulsehttp://www.opentext.com/2/global/products/products-collaboration/products-opentext-extended-collaboration.htm
Tuesday, May 3, 2011
Wednesday, January 26, 2011
Problem Invoice: Post or Return to Supplier
I was recent ask by a client when they should send a problem invoice back to the supplier or should they continue to process the invoice.
Variables to Consider
There are several variables that should be considered when making the decision. For this discussion the first variable assumption will be that the corporation has implement SAP as their core system of record. You must also consider if the invoice input channel is paper or electronic. If you are digitizing the paper invoice, you should consider if you want to scan and create an image before returning or return before imaging.
Manual Process
If you process invoices manually, returning the invoice may seem like the simple approach but keep in mind you must keep some record (typically a spreadsheet) that the invoice was received and returned. If you have already received the goods and / or services, you must still ensure proper accounting for the liability regardless of the invoice.
Automated Process
If you have optimized your Accounts Payable processing utilizing a solution such as SAP Invoice Management, the decision shifts to a best practice of processing the invoice to the point of problem detection and review of problem. This optimization allows for fast analysis. Often the invoice is correct and the resolution requires changing the transactional data such as goods receipt. In other situations, it is more relevant to possibly short pay the invoice and if required to issue a debit memorandum.
Audit Consideration
Even if the resolution is to return the invoice to the sender, processing to the failure point and then sending the invoice back creates a strong audit trail related to the original source document. This audit is often needed for disputed payments.
Returning the Invoice
One major consideration with most vendor master files is the correspondence information includes only the contact information required to purchase from the vendor. If you are returning the invoice, it is the vendor Accounts Receivable department that requires notification. The usually prompts the question …“do I have to update thousands of vendor masters”? The answer is typically no. You would only update the vendors that you do the majority of business with and / or those you know have historically sent problem invoices. After that, you utilize reporting metrics to observe when a trend evolves and update the vendor master at that time.
One last decision is whether to include the original paper invoice or an imaging of the original invoice when communication with the supplier that you will not be processing the invoice. If electronic or if OCR is used for paper invoices, sufficient invoice meta data can be included in the notification email. If the meta data has not been captured, then it typically would improve the process by attaching a copy of the invoice. Being able to return an image not only reduces cost but also provides effective control for the Accounts Payable processing.
So…to return or not to return…that is the question…and as with most complicated business processes the answer is “it depends on the circumstance”.
See SAP EcoHub for more information on SAP Invoice Management
Variables to Consider
There are several variables that should be considered when making the decision. For this discussion the first variable assumption will be that the corporation has implement SAP as their core system of record. You must also consider if the invoice input channel is paper or electronic. If you are digitizing the paper invoice, you should consider if you want to scan and create an image before returning or return before imaging.
Manual Process
If you process invoices manually, returning the invoice may seem like the simple approach but keep in mind you must keep some record (typically a spreadsheet) that the invoice was received and returned. If you have already received the goods and / or services, you must still ensure proper accounting for the liability regardless of the invoice.
Automated Process
If you have optimized your Accounts Payable processing utilizing a solution such as SAP Invoice Management, the decision shifts to a best practice of processing the invoice to the point of problem detection and review of problem. This optimization allows for fast analysis. Often the invoice is correct and the resolution requires changing the transactional data such as goods receipt. In other situations, it is more relevant to possibly short pay the invoice and if required to issue a debit memorandum.
Audit Consideration
Even if the resolution is to return the invoice to the sender, processing to the failure point and then sending the invoice back creates a strong audit trail related to the original source document. This audit is often needed for disputed payments.
Returning the Invoice
One major consideration with most vendor master files is the correspondence information includes only the contact information required to purchase from the vendor. If you are returning the invoice, it is the vendor Accounts Receivable department that requires notification. The usually prompts the question …“do I have to update thousands of vendor masters”? The answer is typically no. You would only update the vendors that you do the majority of business with and / or those you know have historically sent problem invoices. After that, you utilize reporting metrics to observe when a trend evolves and update the vendor master at that time.
One last decision is whether to include the original paper invoice or an imaging of the original invoice when communication with the supplier that you will not be processing the invoice. If electronic or if OCR is used for paper invoices, sufficient invoice meta data can be included in the notification email. If the meta data has not been captured, then it typically would improve the process by attaching a copy of the invoice. Being able to return an image not only reduces cost but also provides effective control for the Accounts Payable processing.
So…to return or not to return…that is the question…and as with most complicated business processes the answer is “it depends on the circumstance”.
See SAP EcoHub for more information on SAP Invoice Management
Monday, November 29, 2010
Electronic Invoicing…A Dog Chasing the Car
What is Electronic Invoicing? Just a simple search of the internet provides several answers. What is the correct way to write the term…spell it out or abbreviate with big E or little e? Does this relate to outbound invoices or inbound invoices? Is this just EDI? I ask for your comments based on my observation below…when you hear e-invoice…what comes to mind?
For my comments, I will use e-invoice and assume it relates to inbound invoices and I will assume that SAP is the backend solution. Invoices can be received electronically through several methods. EDI has been around for many years and seemed to have reached its peak. Most major trading partners were EDI enabled. EDI also requires a specific internal skill set to maintain. The maturity of EDI provides a proven electronic methodology but somewhat relegated to large corporations. Both large companies and small to mid size receive invoices through direct loads from vendor website and upload of files sent from Vendors. The direct link to Vendors is common with purchasing cards while files uploads are common with utilities. All of these electronic methods have in common the elimination of mail room activity and manual data entry. Another commonality is that all may still contain errors in the invoice meta data. Some consider fax or email attachment as electronic but both of these typically require first capture of the image and from that point they are handled the same as paper invoices.
There is a current trend to consider electronic invoice presentment and payment (EIPP) to be e-invoicing as provided by vendor networks. These networks accumulate invoices (typically those invoices still received by paper) from multiple Vendors and then submit them to the respective multiple clients…a many to many relationship. While these networks continue to be unique to specific providers, it is assumed they will eventually provide the ability to “roam” similar to cell phone networks.
Regardless of how a corporation receives e-invoices, it is how you process the header and line item meta data that creates significant additional value to e-invoicing. Moving from paper to e-invoice does not eliminate the vendor from providing incorrect meta data. It does not remove the labor required to correct invoice meta data, to route for approval or to report on the overall end to end processing. It does not provide the necessary process control or audit trails. SAP not only provides the vendor network capabilities through their Crossgate solution, they also provide SAP Invoice Management which is designed to work with all forms of e-invoice.
So not unlike the dog chasing the car…it is what you do with it when you catch it that makes the story most interesting.
See SAP EcoHub for more information on SAP Invoice Managment
For my comments, I will use e-invoice and assume it relates to inbound invoices and I will assume that SAP is the backend solution. Invoices can be received electronically through several methods. EDI has been around for many years and seemed to have reached its peak. Most major trading partners were EDI enabled. EDI also requires a specific internal skill set to maintain. The maturity of EDI provides a proven electronic methodology but somewhat relegated to large corporations. Both large companies and small to mid size receive invoices through direct loads from vendor website and upload of files sent from Vendors. The direct link to Vendors is common with purchasing cards while files uploads are common with utilities. All of these electronic methods have in common the elimination of mail room activity and manual data entry. Another commonality is that all may still contain errors in the invoice meta data. Some consider fax or email attachment as electronic but both of these typically require first capture of the image and from that point they are handled the same as paper invoices.
There is a current trend to consider electronic invoice presentment and payment (EIPP) to be e-invoicing as provided by vendor networks. These networks accumulate invoices (typically those invoices still received by paper) from multiple Vendors and then submit them to the respective multiple clients…a many to many relationship. While these networks continue to be unique to specific providers, it is assumed they will eventually provide the ability to “roam” similar to cell phone networks.
Regardless of how a corporation receives e-invoices, it is how you process the header and line item meta data that creates significant additional value to e-invoicing. Moving from paper to e-invoice does not eliminate the vendor from providing incorrect meta data. It does not remove the labor required to correct invoice meta data, to route for approval or to report on the overall end to end processing. It does not provide the necessary process control or audit trails. SAP not only provides the vendor network capabilities through their Crossgate solution, they also provide SAP Invoice Management which is designed to work with all forms of e-invoice.
So not unlike the dog chasing the car…it is what you do with it when you catch it that makes the story most interesting.
See SAP EcoHub for more information on SAP Invoice Managment
Monday, October 4, 2010
AP and Cash Flow in EU
AP and Cash Flow in EU
Paying invoices late is a worldwide issue. Many companies attempt to apply late fees but are not successful in collecting them. Obviously this is important since it directly impacts cash management including corporate borrowing. Apparently smaller vendors have often become a lending institution for larger companies resulting in government action in the European Union.
In the EU, they are working to secure a level playing field and clear-cut rules for all players, to the benefit of Europe's many small and medium-sized companies. This deal means that SMEs will no longer be forced to serve as banks for public enterprises or big companies.
They are working on legislation that will in most cases require payment within 30 days. If not paid in 30 days there will be an 8% surcharge along with a fixed fee of 40 Euros. While this applies to the EU it is fair warning for the rest of the world.
In the UK, many corporations have already accepted the challenge by the government to pay within 10 days yet late payment continues.
It is my opinion that to assure timely payments, corporations will have to optimize their Accounts Payable solutions including document archive, OCR and most certainly business rule driven automated processing. Other options while appealing on the surface typically add more than late fees. These options include quick pay without any analysis or at the most spot analysis. For those corporations utilizing SAP as their system of record, the solution is immediately available. SAP provides Document Archiving, OCR and Invoice Management for full Accounts Payable optimization. These solutions when implemented should allow not only for improved accuracy, lower staffing requirements, elimination of duplicate payments and compliance control, they will also ensure payment within the 30 day window…or better yet 10 days as in the UK.
See SAP EcoHub for more information on SAP Invoice Management.
Paying invoices late is a worldwide issue. Many companies attempt to apply late fees but are not successful in collecting them. Obviously this is important since it directly impacts cash management including corporate borrowing. Apparently smaller vendors have often become a lending institution for larger companies resulting in government action in the European Union.
In the EU, they are working to secure a level playing field and clear-cut rules for all players, to the benefit of Europe's many small and medium-sized companies. This deal means that SMEs will no longer be forced to serve as banks for public enterprises or big companies.
They are working on legislation that will in most cases require payment within 30 days. If not paid in 30 days there will be an 8% surcharge along with a fixed fee of 40 Euros. While this applies to the EU it is fair warning for the rest of the world.
In the UK, many corporations have already accepted the challenge by the government to pay within 10 days yet late payment continues.
It is my opinion that to assure timely payments, corporations will have to optimize their Accounts Payable solutions including document archive, OCR and most certainly business rule driven automated processing. Other options while appealing on the surface typically add more than late fees. These options include quick pay without any analysis or at the most spot analysis. For those corporations utilizing SAP as their system of record, the solution is immediately available. SAP provides Document Archiving, OCR and Invoice Management for full Accounts Payable optimization. These solutions when implemented should allow not only for improved accuracy, lower staffing requirements, elimination of duplicate payments and compliance control, they will also ensure payment within the 30 day window…or better yet 10 days as in the UK.
See SAP EcoHub for more information on SAP Invoice Management.
Monday, September 27, 2010
Paper Invoices Can Be Best Practice
I am often ask by corporations “what is best practice for invoice receipt…paper, vendor networks, EDI, direct uploads, vendor portal ?”…and the answer is YES. Most corporations rely on multiple invoice input channels. That often prompts the reply…”you included paper as best practice…are you sure?”
While electronic communication has long been best practice for almost every aspect of our businesses, invoices continue to be generated primarily as paper. The obvious negatives related to filing and retrieval of paper is compounded by the variability of the paper. This variability includes where the data is located on the invoice such as purchase order number, the quality of the paper, the quality of the printer, handling during transmittal (folding, staples, getting wet), handling after transmittal (tears, coffee cup rings, more staples) and the addition of meta data such as a time stamp showing date received or hand written notes. But on a good note I am sure that ALL your invoices are in one language and one currency? Add to this the simple task of routing the paper with in a business process (isn’t land mail great!) and you have all the necessary ingredients for making a bad process.
It might be ask that how can this be considered a bad process since paper invoices are currently used by most successful corporations.
It is not how you receive invoices but how you work with them. How you capture and use this business content is what takes you down the path of best practice or bad practice. It is the header and line item meta data that is important in the Accounts Payable processing and not the document itself. The paper is obviously just a mechanism to convey the meta data. Best practice requires that you immediately scan and store the image while linking to the accounts payable posting within the accounting system. The content will be electronically extracted from image, tested and corrected to ensure accuracy and completeness and then automatically posted. The invoice is the result of procurement, which is the component of a larger business transaction that required the purchase. It is necessary to also link the structured AP document to additional structured documents such a purchase order and unstructured information such as contained in emails related to the purchase. It is also a requirement that the AP information be addressed by corporate record retention.
Since best practice in Accounts Payable is more about the content and use of the content than the paper itself; receiving paper invoices can still be a best practice! Many corporations have already taken the best practice initiative of moving to an ERP such as SAP. When the invoice receipt is paper based, SAP provides the best practice solution by offering all the necessary components including Document Archive for scan and storage, Invoice Management for OCR and exception processing and ECM to manage invoices as one component of the enterprise picture.
If you handle the content properly most certainly, those paper invoices can become a best practice.
While electronic communication has long been best practice for almost every aspect of our businesses, invoices continue to be generated primarily as paper. The obvious negatives related to filing and retrieval of paper is compounded by the variability of the paper. This variability includes where the data is located on the invoice such as purchase order number, the quality of the paper, the quality of the printer, handling during transmittal (folding, staples, getting wet), handling after transmittal (tears, coffee cup rings, more staples) and the addition of meta data such as a time stamp showing date received or hand written notes. But on a good note I am sure that ALL your invoices are in one language and one currency? Add to this the simple task of routing the paper with in a business process (isn’t land mail great!) and you have all the necessary ingredients for making a bad process.
It might be ask that how can this be considered a bad process since paper invoices are currently used by most successful corporations.
It is not how you receive invoices but how you work with them. How you capture and use this business content is what takes you down the path of best practice or bad practice. It is the header and line item meta data that is important in the Accounts Payable processing and not the document itself. The paper is obviously just a mechanism to convey the meta data. Best practice requires that you immediately scan and store the image while linking to the accounts payable posting within the accounting system. The content will be electronically extracted from image, tested and corrected to ensure accuracy and completeness and then automatically posted. The invoice is the result of procurement, which is the component of a larger business transaction that required the purchase. It is necessary to also link the structured AP document to additional structured documents such a purchase order and unstructured information such as contained in emails related to the purchase. It is also a requirement that the AP information be addressed by corporate record retention.
Since best practice in Accounts Payable is more about the content and use of the content than the paper itself; receiving paper invoices can still be a best practice! Many corporations have already taken the best practice initiative of moving to an ERP such as SAP. When the invoice receipt is paper based, SAP provides the best practice solution by offering all the necessary components including Document Archive for scan and storage, Invoice Management for OCR and exception processing and ECM to manage invoices as one component of the enterprise picture.
If you handle the content properly most certainly, those paper invoices can become a best practice.
Friday, July 23, 2010
Rule Based Business Process Optimization
Replacing Human Touch Point…Not the Human Logic
Too often business improvement is just about automation without optimization. When optimizing a business process one must always ask the question “what value does this step add”? When dealing with the every growing meta data processed in an ERP such as SAP, this question becomes most relevant. The transformation from transactional to process flow requires that you take this evaluation and expand it to “what value does this step add and does it require human intervention”. Expansion of the evaluation criteria provides true optimization. As an example, consider the Accounts Payable portion of the procure to pay (P2P) process flow. Typically in a manual process flow there are numerous touch points that require a human touch point to apply logic to evaluate the invoice meta data and make a decision. These touch points include but are not limited to data capture, filing of paper invoices, evaluation of meta data for completeness and accuracy, account assignment and invoice approval. With a fully optimized accounts payable solution such as offered by SAP with SAP Invoice Management, it is possible to build a rule set that captures much of the human logic required to process an invoice and to apply that logic systematically.
Rule Categories Examples
Completeness – Most business processes are based on processing meta data. In AP, the initial meta data is on the invoice. SAP requires that certain information be provided by the supplier. One option is to have a human look at every invoice to see if all the required information is provided. Just one missing data point can result in non value adding time spent researching and collaborating to fill in the blank. Business rules utilize the human logic captured in code to test that every required field provide some meta data. At this point it may be wrong but at least it is there.
Master Data Validation – Once the meta data capture is complete, business rules compare the input against known values in master data to ensure it is valid. One example would be to ensure the purchase order provided on the invoice is within the SAP number range. If not, automatically route to a predetermine role for resolution.
Compliance (Legal Requirements) – Business rules can also ensure that information legally required or required by corporate rules is included. One example is VAT. Business rules can also ensure proper flow of information such as NFE requirements in Brazil.
Country Specific – Most countries have rules to do business in their specific country such as NFE in Brazil mentioned above or GST / PST in Canada. Human logic encapsulated in a business rule never forgets to ensure the information is there for selected countries but does not bother looking when the invoice is from another country.
Best Practice – Business rules can also ensure best practice such as capturing at least 2 approvals for invoices over a stated dollar level threshold.
Most Common / Most Practical – Business rules can also be made flexible so that while typically enforcing process flows such as the 2 approvals required, given selected variables, rules can deviate if it is more common in a specific company to acquire 3 signatures. If due to lack of staff in a remote location one person orders, received and approves purchases, rules can be set to allow one person to handle the process flow in a practical manner.
Reporting on the Rules
When the business process is initially designed for optimal results and automation is applied such as with SAP Invoice Management, it is critical reporting provides process metrics for human analysis. It may be necessary to adjust the follow due to changing business rules. In addition, automation should never be hidden in the “black box”. It is all too easy for those with fraud on their minds to use automation to their advantage if no one is watching the output…so…when you eliminate the human element during the process…do not eliminate the human element in review of the output. Even if you utilize automated trend analysis to spot trouble points, it always requires that human element to decide if variations are random or “randomly on purpose”.
Don’t Rule out Success…Rule in Success!
Not only does the application of business rules enable improved accuracy in the Accounts Payable process flow, it frees up the Accounts Payable Professional to focus more attention on those value adding task such as cash flow management and vendor relationships. The economy has resulted in cyclical employment levels in back office functions like Accounts Payable. Capturing and automating the human logic where possible, prevents the loss of critical process knowledge during economic downturns.
In my various speaking engagements, I often ask how many things typically go wrong when processing an invoice…the answers normally vary between 5 and 15. SAP Invoice Management applies 47 unique business rules and if you consider many are run twice…once for PO invoices and once for Non PO Invoices…the rules are applied 71 times. Checking an invoice with 47 rules rather than 15 yields significant improvement in the completeness and accuracy of financial data while ensuring compliance. In summary, utilize business rules as an integral component of your business process improves initiatives to drive increased success to your efforts.
Too often business improvement is just about automation without optimization. When optimizing a business process one must always ask the question “what value does this step add”? When dealing with the every growing meta data processed in an ERP such as SAP, this question becomes most relevant. The transformation from transactional to process flow requires that you take this evaluation and expand it to “what value does this step add and does it require human intervention”. Expansion of the evaluation criteria provides true optimization. As an example, consider the Accounts Payable portion of the procure to pay (P2P) process flow. Typically in a manual process flow there are numerous touch points that require a human touch point to apply logic to evaluate the invoice meta data and make a decision. These touch points include but are not limited to data capture, filing of paper invoices, evaluation of meta data for completeness and accuracy, account assignment and invoice approval. With a fully optimized accounts payable solution such as offered by SAP with SAP Invoice Management, it is possible to build a rule set that captures much of the human logic required to process an invoice and to apply that logic systematically.
Rule Categories Examples
Completeness – Most business processes are based on processing meta data. In AP, the initial meta data is on the invoice. SAP requires that certain information be provided by the supplier. One option is to have a human look at every invoice to see if all the required information is provided. Just one missing data point can result in non value adding time spent researching and collaborating to fill in the blank. Business rules utilize the human logic captured in code to test that every required field provide some meta data. At this point it may be wrong but at least it is there.
Master Data Validation – Once the meta data capture is complete, business rules compare the input against known values in master data to ensure it is valid. One example would be to ensure the purchase order provided on the invoice is within the SAP number range. If not, automatically route to a predetermine role for resolution.
Compliance (Legal Requirements) – Business rules can also ensure that information legally required or required by corporate rules is included. One example is VAT. Business rules can also ensure proper flow of information such as NFE requirements in Brazil.
Country Specific – Most countries have rules to do business in their specific country such as NFE in Brazil mentioned above or GST / PST in Canada. Human logic encapsulated in a business rule never forgets to ensure the information is there for selected countries but does not bother looking when the invoice is from another country.
Best Practice – Business rules can also ensure best practice such as capturing at least 2 approvals for invoices over a stated dollar level threshold.
Most Common / Most Practical – Business rules can also be made flexible so that while typically enforcing process flows such as the 2 approvals required, given selected variables, rules can deviate if it is more common in a specific company to acquire 3 signatures. If due to lack of staff in a remote location one person orders, received and approves purchases, rules can be set to allow one person to handle the process flow in a practical manner.
Reporting on the Rules
When the business process is initially designed for optimal results and automation is applied such as with SAP Invoice Management, it is critical reporting provides process metrics for human analysis. It may be necessary to adjust the follow due to changing business rules. In addition, automation should never be hidden in the “black box”. It is all too easy for those with fraud on their minds to use automation to their advantage if no one is watching the output…so…when you eliminate the human element during the process…do not eliminate the human element in review of the output. Even if you utilize automated trend analysis to spot trouble points, it always requires that human element to decide if variations are random or “randomly on purpose”.
Don’t Rule out Success…Rule in Success!
Not only does the application of business rules enable improved accuracy in the Accounts Payable process flow, it frees up the Accounts Payable Professional to focus more attention on those value adding task such as cash flow management and vendor relationships. The economy has resulted in cyclical employment levels in back office functions like Accounts Payable. Capturing and automating the human logic where possible, prevents the loss of critical process knowledge during economic downturns.
In my various speaking engagements, I often ask how many things typically go wrong when processing an invoice…the answers normally vary between 5 and 15. SAP Invoice Management applies 47 unique business rules and if you consider many are run twice…once for PO invoices and once for Non PO Invoices…the rules are applied 71 times. Checking an invoice with 47 rules rather than 15 yields significant improvement in the completeness and accuracy of financial data while ensuring compliance. In summary, utilize business rules as an integral component of your business process improves initiatives to drive increased success to your efforts.
Sunday, July 4, 2010
How To Communicate Without Saying a Word
How to Communicate Without Saying a Word
This can be a difficult challenge in the world of Accounts Payable when working to post invoices accurately and quickly. Just accurately and quickly alone is a major task but when you add “quietly”…is it really possible?
Think of all the people involved…Accounts Payable Professionals, Approvers, Corporate Procurement, Field Procurement, Receiving, Contract Management, Master Data Management, Tax Professionals…just to name a few. There are a number of Vendors offering solutions to address the accurate and quick...although in many cases you have to decide…do you want it accurate or quick…one or the other but not both. Yet very few address the quietly issue. Why is this important? For invoices that are received and immediately posted without any human intervention due to issues such as problem resolution or approval, communication is not a critical factor. Yet when that 80/20 rule kicks in where 20% of your invoices result in 80% of the problems, the Accounts Payable Professional must reach out and communicate. They need to communicate with the individuals that have both the knowledge and security authorization to resolve / approve invoices as required by best practice separation of duties. As an example, in an ERP such as SAP this communication is often started by running a report such as MRBR to find invoices blocked for payment. Without a solution that includes “quietly” as a building block, the first communication triggers a barrage of activity including but not limited to emails, phone calls, entries into spreadsheets for follow up, follow up calls, making copies of invoices and pulling contracts.
So how do you add “quietly” to the process flow? You must examine the entire process flow from how you receive the invoice, how you capture the meta data at the header and line item level, how you determine if there is a problem and then who must be involved to resolve / approve. Equally important is anticipate what that person requires to complete the task…such as…access to invoice and related document images, history of others that have worked on the process including their comments, transactional data such as purchase order, goods receipt, prior postings to purchase order and options to resolution / approval.
One excellent example of a “quite” solution is provided by SAP with their SAP Invoice Management and optional OCR.
One last thought…quiet extends to reporting also…you need to anticipate the need for information related to the invoice. While invoice payment status is certainly important you must also anticipate others will want to know trends such as invoices paid without problem and if a problem…what type of problem is most common. Yet a truly quiet process goes beyond the expected reporting…the invoice occurred because of a purchase…the purchase occurred due to a larger business process such as a building project and so on. You must anticipate that others must be able to see the invoice as part of the bigger picture. This bigger picture is ECM. You would expect that a large ERP would anticipate this more holistic requirement and SAP has also done that by providing an ECM solution through it partnership with Open Text that takes the invoice and quietly makes it available as part of the ECM big picture. This allows you to see for example all the invoices from one vendor on one project in one virtual view or to see all the invoices related to the project regardless of vendor. No longer is it required to communicate and ask the Accounts Payable Professional to accumulate all the related information and wait for a response…it is already waiting for you to access immediate and quietly.
So…Accurate…Quick…Quiet…yes it is possible!
See SAP EcoHub for More on AP Optimization
This can be a difficult challenge in the world of Accounts Payable when working to post invoices accurately and quickly. Just accurately and quickly alone is a major task but when you add “quietly”…is it really possible?
Think of all the people involved…Accounts Payable Professionals, Approvers, Corporate Procurement, Field Procurement, Receiving, Contract Management, Master Data Management, Tax Professionals…just to name a few. There are a number of Vendors offering solutions to address the accurate and quick...although in many cases you have to decide…do you want it accurate or quick…one or the other but not both. Yet very few address the quietly issue. Why is this important? For invoices that are received and immediately posted without any human intervention due to issues such as problem resolution or approval, communication is not a critical factor. Yet when that 80/20 rule kicks in where 20% of your invoices result in 80% of the problems, the Accounts Payable Professional must reach out and communicate. They need to communicate with the individuals that have both the knowledge and security authorization to resolve / approve invoices as required by best practice separation of duties. As an example, in an ERP such as SAP this communication is often started by running a report such as MRBR to find invoices blocked for payment. Without a solution that includes “quietly” as a building block, the first communication triggers a barrage of activity including but not limited to emails, phone calls, entries into spreadsheets for follow up, follow up calls, making copies of invoices and pulling contracts.
So how do you add “quietly” to the process flow? You must examine the entire process flow from how you receive the invoice, how you capture the meta data at the header and line item level, how you determine if there is a problem and then who must be involved to resolve / approve. Equally important is anticipate what that person requires to complete the task…such as…access to invoice and related document images, history of others that have worked on the process including their comments, transactional data such as purchase order, goods receipt, prior postings to purchase order and options to resolution / approval.
One excellent example of a “quite” solution is provided by SAP with their SAP Invoice Management and optional OCR.
One last thought…quiet extends to reporting also…you need to anticipate the need for information related to the invoice. While invoice payment status is certainly important you must also anticipate others will want to know trends such as invoices paid without problem and if a problem…what type of problem is most common. Yet a truly quiet process goes beyond the expected reporting…the invoice occurred because of a purchase…the purchase occurred due to a larger business process such as a building project and so on. You must anticipate that others must be able to see the invoice as part of the bigger picture. This bigger picture is ECM. You would expect that a large ERP would anticipate this more holistic requirement and SAP has also done that by providing an ECM solution through it partnership with Open Text that takes the invoice and quietly makes it available as part of the ECM big picture. This allows you to see for example all the invoices from one vendor on one project in one virtual view or to see all the invoices related to the project regardless of vendor. No longer is it required to communicate and ask the Accounts Payable Professional to accumulate all the related information and wait for a response…it is already waiting for you to access immediate and quietly.
So…Accurate…Quick…Quiet…yes it is possible!
See SAP EcoHub for More on AP Optimization
Subscribe to:
Posts (Atom)
