Leading industry analysts report that “Spend Under Management” ranges from 89% for best in class to an industry average of 66% and 32% for laggards.
Efforts over the past decade have greatly improved the Spend Management and Procurement processes, with requisitions, approval workflows, budget controls and vendor contracts. ERPs and ISV add-on solutions record items or services received, and match invoices to receipts, purchase orders, and vendor contracts.
Despite all efforts to increase spend under management, many organizations receive a large number of non-PO invoices. Examples are emergency spending, legal services, consultants, facility services, repairs, utilities or taxes. If you were surprised with over budget invoices for snow removal last winter, you are not alone!
Non-PO invoices typically end up in Accounts Payable. AP determines the authorized approvers, and sends the invoice for approval by paper mail circulation with an approval slip, by e-mail, or using generic tools like SharePoint. Document Management systems can be tailored for the document approval process, but are often not cost-justified for AP Invoice applications alone, or may not have the necessary tight integration with the ERP’s General ledger distribution, vendor contracts, or budgets.
Typical pain points associated with processing non-PO invoices are:
- Manual approvals – lost or misplaced invoices, late payment charges or lost discounts.
- Excessive time for entering and tracking invoices.
- Failure to correct invoices discrepancies or enforce vendor contracts.
- No historical tracking for audits.
A Check Request process applies the same discipline as transactions originated by Requisitions and Purchase Orders. This includes:
- Approval workflows based on customizable criteria, most often the amount, department, type of expense, GL account, company, project, vendor contract, and budget status.
- Inline view of the invoice document along with the transaction, secure document storage and retrieval for research.
- Tracking of invoices to vendor contract commitments and detection of variances.
- Automatic interface for a fully coded and approved transaction to AP for payment.
AP Invoice Automation solutions allow you to gradually increase the level of efficiency to match business need and invoice volume.
- Invoices are scanned to a folder, and presented as a window in the transaction entry screen. The invoice image is available throughout the approval process.
- Vendor invoices sent to a specific e-mail inbox automatically create a transaction with pre-filled vendor information.
- The vendor self-serve portal allows your approved vendors to log in, view purchase orders, and enter invoices.
- PunchOut cXML billing for electronic orders eliminates most data entry but continues to enforce approval workflows.
AP Invoice Automation Benefits Summary
- Turn paper into easily accessible electronic documents.
- Enforce spend controls for non-PO transaction.
- Generate real savings from credit notes for overbilling (rates or hours), discrepancies with work orders, or vendor contracts. Eliminate lost discounts and late penalty charges.
- Reduce labor cost in AP – let vendors enter invoices, or load PunchOut invoices automatically.
by Paramount Technologies
