Despite all the automation technology on the market today, one department that I consistently see falling behind the automation curve is Accounts Payable (AP). I am surprised at the number of otherwise well run businesses that still have a large clerical staff routing and hand keying paper invoices. AP may not seem the like the most obvious place to look for your next strategic process improvement initiative, but can provide high returns especially if it enables you to take advantage of those attractive early pay discounts.
There is a wide range of technology solutions for the Procure to Pay (P2P) process varying in cost and complexity. Fully automated e-Invoicing solutions that are tightly integrated with your ERP, such as that from Ariba Inc., are available but may only make sense for large companies with a lot of IT dollars to spend.
The following are less costly technology solutions and process tweaks (some of which I will expand upon in future blog posts) that can be done in the near term to make your P2P process and AP department more efficient and effective.
- Centralized Invoice Receipt
- Optical Character Recognition
- Electronic invoice routing/workflow
- Payment term extension
- Discount Program expansion
Implementing some or all of the above can quickly offer savings through head count reduction, error reduction and increased cash flow through DPO extension and discounts.