Your Accounts Payable Department CAN Help You Save Time and Money
Always trying to make your Accounts Payable (AP) Department more efficient is a goal of many organizations. For a quick review here are two of the most effective efficiencies that you should already have in place:
- For large scale suppliers with high volume: These transactions should be easy to automate with EDI, Custom Interfaces, Receiving and Matching, etc.
- For lower volume suppliers: You can also take advantage of automation too with the use of reusable, standardized spreadsheet upload templates.
Once these efficiencies are put into place, the respective invoices can be processed with very little AP Department time. Obviously the best way to make your AP Department more efficient is to find ways to standardize as many transactions as possible. But that goal often is not easy.
Ultimately as more and more efficiencies are put into place, AP is left with the transactions which cannot be automated easily and often require extra time to be processed manually. These might fall into one of several categories:
- Very low volume suppliers
- Invoices without purchase orders
- Invoices that do not match purchase orders
- Invoices that do not match receivers
- PO change orders
- Invoices not submitted to AP in a timely fashion
- Invoices that fail budget checking
- Invoices with bad account coding, etc.
Most of the above transaction types not only require manual processing but often require trouble- shooting between AP and the ordering department(s) to clean up the discrepancies/issues before the invoices can be made available for payment.
So, if you have done everything you can to automate transactions where feasible, then your remaining transactions will just be the ones that command the most time to process. The goal now is, “How can we resolve these discrepancies/issues as quickly as possible?” Even better, “What can we do upfront to avoid these issues again in the future?” Often these issues are cleaned-up as payment priorities dictate. Meaning that the underlying issues do not always get the necessary attention and the problems ultimately happen again.
Over the past 20 years I have worked with many organizations and some organizations have learned to stay a step ahead of these discrepancies/issues better than other organizations. The one common thread that I have seen is that some organizations have better procedures or better adherence to procedures.
Since the problems tend not to surface until the invoice arrives, this means that the Accounts Payable Department is often tasked with leading the cleanup effort. In reality the ability for departments outside of AP to be pro-active is often a luxury. However, a useful job aid tool that I have seen organizations use is a checklist with the top 5 or 10 items that the ordering departments should have in place with every order. By doing so, this greatly improves the probability that the transactions will be clean and that invoices will be processed in a timely fashion and use a minimum of Accounts Payable and Ordering Department time to process. I would call this a win-win.
When using systems such as PeopleSoft, we can take full advantage of its many automated system features such as EDI processing and AP/PO matching to save time and money. To further improve efficiency for those remaining manual and sometimes difficult transaction types you will need improved procedures or improved adherence to procedures.
All organizations have these difficult transaction types which just seem to take a long time to process. So now is the time to work with your AP Department to help build these procedures or job aids to improve efficiency on these remaining transaction types. In the long run everyone wins. Transactions are cleaner, payments are not delayed, supplier relationships are better maintained and less time is spent on cleanup……..and the best news is the positive impact on the bottom line.
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Please also be sure to contact Larry Zagata if you have questions about any of the recent changes to PeopleSoft or ANY PeopleSoft questions.
Steven J Brenner
Senior Principal Consultant
MIPRO Consulting
steven.brenner@miproconsulting.com
