Accounts payable (AP) departments depend on invoice approvers to do their jobs so the bills get paid. If an invoice is hung up in the approval process, you’re likely to pay it late — and lose any associated discounts — if AP is unable to track down and promptly remedy the problem. Late payments can also result in disgruntled vendors, which is bad for your business.
Perhaps even worse, not being able to control who has approval authority can result in people who should not have permission – or do not really know whether an invoice is legitimate or not – actually authorizing payments. That can result in fraud, overpayments and duplicate payments.
Given that AP’s ability to do its job depends on how efficient the approval process is, you’d think that transparency on this issue would be an absolute requirement of any invoice processing solution.
To test that theory, Hyland, in collaboration with the Institute of Finance and Management (IOFM), surveyed more than 300 AP professionals to see how much insight and control they have over this process. We compared this data to their level of accounts payable automation to see whether their software solutions make this task easier or not.
They asked two important questions:
1. Given your current invoice processing environment, how easy or difficult is it to configure and modify business rules to add or remove approvers?
2. How well can your organization track and monitor the activity of approvers outside the AP department?
Adding and removing approvers
Particularly in large organizations, where there is frequent staff turnover and new vendors coming on board all the time, agility is key.
Here’s what participants reported, correlated to level of accounts payable automation.
More than half of respondents with significant automation said this is an easy process for them. Those with moderate and limited automation reported this to be the case about one-third of the time. For those participants with limited automation, the struggle is real — nearly four out of 10 of them found adding or removing approvers difficult or extremely difficult.
How does this affect organizations with lesser levels of automation?
Setting up new approvers or removing old ones can be a difficult process; one that takes time and effort. That difficulty can result in invoices being misrouted to the wrong approvers and either ignored or “rubber stamped” by them in order to make them go away. In another possible scenario, AP might hold the invoices until the new approvers are set up, resulting in late payments.
Tracking non-AP approvals
Our second question involves AP respondents’ ability to see how those in other departments are handling their invoice approvals. This should be a simple enough matter — just research any in-process invoice and determine where a bottleneck is.
Is someone out of the office? Has there been a change in responsibility that AP was unaware of? Was it routed to the wrong individual? Is there a problem with the goods or services received?
We asked survey participants to evaluate their insight into non-AP staff approver activity during invoice processing and rank it as complete, partial or none at all.
Again, we see that organizations with significant automation have a distinct advantage — in fact, they are able to track non-AP approver activity about twice as well as those with either moderate or limited automation.
And once again, those with limited automation have an uphill battle, with over four out of 10 of them reporting they have no ability whatsoever to track this activity.
Given the importance of timely approvals, transparency into an organization’s business rules and invoice tracking is paramount. Without this information, AP cannot perform at its optimal level.
While it’s reassuring that more automation yields better control and compliance when it comes to payment processing, is it enough? Remember that even those organizations with significant automation reported that adding or removing approvers was easy or extremely easy only a little more than half the time, and there was no non-AP approver tracking available at all for a fourth of the respondents in this same group.
Accounts payable automation should be making this process very simple — but it isn’t in many cases. If this is your experience, it’s time to ask yourself: Are your AP processes out of control?
In accounts payable, poor control over invoice processing can result in higher costs, more errors, upset suppliers, and a greater risk of fraud. Get in touch with one of our data capture and document management experts today by emailing email@example.com to learn how a a comprehensive Accounts Payable solution can transform your business.
This article originally appeared on Hyland.com. Inpute Technologies are proud partners of Hyland in Ireland. Our team of certified OnBase professionals are available to discuss your document content and case management and workflow requirements. OnBase, by Hyland is a single enterprise information platform for managing content, processes and cases. OnBase has transformed thousands of organisations worldwide by empowering them to become more agile, efficient and effective.