Accounts Payable Operations – AP Workflow – Application of Company Business Rules

By NE Docs | December 28, 2016

Application of Company Business Rules

If you were to create process maps for every type of invoice scenario your company has, how many decision blocks would there be?

  • PO or Non-PO?
  • 2 or 3-way match?
  • Inventory or not?
  • Sales tax due or not?
  • Which Company or Location Code?

How much decision making is an Accounts Payable processor responsible for?

We are all human so I can safely assume mistakes are being made. Unless there is a robust post-processing audit, there can be quite a lag between the processing and the discovery of a mistake if it is found at all.

Did you know that Accounts Payable Workflow systems can be configured with best practice business rules? Whether based on your current processes, the system provider’s standard rules or a combination of both, the results will lead to the accurate processing of invoices that meet the agreed upon rules. If an invoice does not meet the rules, it can be sent to a task list assigned to Accounts Payable for their exception handling or the exception invoice can be auto-routed to a party outside of Accounts Payable responsible for taking the appropriate action, all within the system and all tracked through an audit trail. AP will no longer have to copy or scan invoices for manual routing. Additionally, no tracking log will need to be maintained.

Here are some examples of rules that can be managed within an AP Workflow system:

Once invoice images are loading into the system, and key invoice data is captured, the system can start comparing the data to the rules. If the invoice is identified as a Purchase Order related invoice, the system can then attempt to perform a 2 or 3-way match. For the purposes of this article, let’s assume a 3-way match requirement. The system can confirm whether the quantities and unit prices billed match the Purchase Order, can identify any Purchase Price Variances and confirm whether the PPV is within acceptable tolerances or not. Additionally, the invoice can be auto-matched to available Goods Receipts. If all the quantity ordered has been received and already matched to invoices or the Goods Receipts have not been posted, based on authorized business rules, the AP Workflow system can be configured to route the exception invoices to either Accounts Payable or directly to the person responsible for taking the appropriate action.

Wondering about Non-PO invoices?

Those can be effectively managed as well. For example, if all invoices from Vendor XYZ are always allocated to the same Account Coding then sent to Mr. Jones for approval, coding and routing templates can be applied to automate this process. Once the invoice is approved, the details can be sent directly into the ERP system. Accounts Payable would not need to “touch” Non-PO Invoices. Note that the coding can be assigned to multiple accounts based on either a set dollar amount or by percentage. These coding and routing templates are managed by the Company so changes and additions can be made anytime.

Speaking of coding, how often are invoices returned to AP with incorrect or incomplete coding? With AP Workflow, if the coding needs to be entered manually, the coding string can be validated at the time of entry. Upon entry of invalid data, the user will be informed by the system immediately. No need for Accounts Payable to send the invoice back out for the details to be corrected.

Another benefit of an automated workflow is the ability to apply Delegation of Authority and Business Hierarchy rules. If person “A” only has $500 approving authority but the invoice is for $1,000, let the workflow system determine the next level up manager with the DOA to approve that invoice. Does your company require duplicate approvals for some but not all invoices? The rules can be configured and the invoices can be auto-routed to the second approver based on who the first approver was. And the approvers do not need to be in the office to review invoices and approve them! Additionally, the approving signature does not need to be deciphered by an AP Processor.

Finally, very detailed audit trails are built automatically by the system and are available to anyone with access to the invoices. All actions taken on an invoice are recorded. The trail includes the name of the person performing the action, the date, time and a description of the action taken.

Want to learn more? Contact New England Document Systems. They have the experience, and the resources to assist you; from answering your questions about available solutions to helping you to implement the right tool. Contact us to discuss just how much improvement you want to see in your Accounts Payable Operation.

This article is part of New England Document Systems’ partnership with industry experts. This contribution was written by Anne Wheeler of CS Process Flows, LLC. Anne is a Consultant and Project Manager specializing in Accounts Payable processes and systems.

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