Accounts Payable Operations – AP Workflow – Starting the Conversation with Potential Providers

By NE Docs | January 27, 2017

AP Workflow – Starting the Conversation with Potential Providers

Once a Company starts contacting Accounts Payable Workflow Providers, it enters the Potential Provider’s sales cycle. Listen carefully, ask detailed questions, and take notes. As expected, the Company will hear all the benefits of implementing that Provider’s AP Workflow System. A Company may walk away from such a conversation feeling like that system can process any invoice from beginning to end without human intervention. This is not the case.

It is true an AP Workflow System can auto match invoices to Purchase Orders based on a Company’s matching rules and that Non-PO invoices can flow through a System without Accounts Payable needing to “touch” them. However, if an invoice does not meet the business rules configured within the System, the invoice will be “rejected” to a queue for an Accounts Payable Processor to work.

Most AP Workflow Systems will have standard business rules as part of the basic set-up. None the less, even these may need to be modified to meet a Company’s needs.

How can a Company ensure the most complete and successful implementation, within the shortest time frame possible, that automatically addresses as many invoices as possible? Do the homework before speaking with any Potential Providers.

  • Know the process flows currently performed by Accounts Payable.
  • Know what the Company wants to automate.
  • Document all requirements. Do not assume what a System can supply.
  • Include a Subject Matter Expert (SME) on the project team, even if the right choice is an unbiased external resource.

Once a Company enters conversations with Potential Providers;

  • Do not let the Potential Provider make assumptions.
  • Ask questions; even if one considers it a “dumb” question.
  • Respond clearly and concisely to any questions a Potential Provider may have.
  • Two way conversation is key; be sure both parties fully understand each other.

The initial conversation between a Company and Potential Provider usually starts with the Potential Provider asking a standard set of questions to determine the correct system configuration to supply a quote for. Sounds simple enough but what happens if the list of questions doesn’t cover all Company processes? If issues are identified after the signing of a contract, additional expenses may need to be incurred to cover the costs of further engineering work.

For example, let’s start at the “simple” step of collecting data from an invoice. The standard information captured from an invoice and entered into an AP Workflow System is:

  • Vendor Name
  • Remit to Address
  • Invoice Number and Date
  • Purchase Order number if applicable
  • Line details (Quantity Billed, Unit Price) for a pre-determined number of invoice lines
  • Tax and Freight amounts if applicable
  • Invoice total

What if a Company also requires the “ship to” address? The Potential Providers should be informed of this in the initial conversation. It may seem like an insignificant issue but it could have a negative impact on an implementation timeline; especially if the data to be collected impacts invoice flow business rules. Not only would the Provider need to capture this data moving forward but the System might need to be re-configured. Both could result in higher costs to the Company if shared later in the implementation time line.

Don’t be surprised if the Potential Providers asks “why”. For example, “Why does AP need the “ship to” address?” Supply as much detail as possible when responding. The Potential Provider may have an alternate solution for automating what is currently a manual process.

A Company needs to understand and document what the AP Processors look for when processing an invoice manually for the Potential Providers to automate the process.

  •  Does AP use a Customer Account Number to decide how to code the invoice?
  • Is the ship to address used to determine how taxes billed on the invoice are to be allocated?
  • Are banking details supplied on an invoice leveraged at the time of processing to determine the payment method to be used for that invoice?

Let’s move along to the invoice types. Does the Company have different rules for allocating freight or taxes billed on a PO invoice versus a Non-PO invoice? For that matter, does the Company have different types of Purchase Orders? Are the rules different depending on these types? If so, document the scenarios. If a Company does not have details documented before entering into conversations with a Potential Provider, it is safe to say the implementation schedule will suffer as the “how’s and why’s” are ironed out.

When initiating conversations with Potential Providers, ask them about their requirements gathering methods. Ideally, a series of onsite visits is the way to go.

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 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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