First, let’s consider the definition. A disaster is a severe inability to function as usual.
Does your company have a Disaster Recovery Plan? Is the Accounts Payable operation sufficiently covered?
For this article, I am assuming the answer is yes but what would have to happen before the plan is activated?
Over the course of my career, the company’s Disaster Recovery Plan was put into action only once. Fortunately, the event did not affect the building or the contents but the building was shut down for a week. Once opened many employees could not report to work.
How long would it take your Accounts Payable Operation to get back on track? Phones were ringing off the hooks once we returned. Rightfully so, vendors were looking for payments due or promised to them the prior week and managers were asking when costs would hit their projects. Did I mention this all happened at quarter-end?
How were we able to get back on track within a few weeks? The first step was to release payments for all invoices that had already been processed and were due.
Then we got busy processing invoices. Yes, processing. After being shut down for a week, you might expect that we received piles of mail that first day back. Imagine the time you would need to open a week’s worth of envelopes. Additionally, invoices sent by email would need to be printed. Then the invoices would need to be sorted by PO versus Non-PO, right?
Just a year prior, the company had implemented Accounts Payable Workflow Software as a Service (SaaS). Even though we were unable to be in the office, any invoices emailed in were electronically loaded into the software almost immediately. Invoices mailed by the vendors were collected from the Post Office, scanned and uploaded into the system by a third party provider located outside of the “disaster” area.
Also, due to the automation provided by the Workflow System, up to 47% of the Purchase Order invoices received were processed without anyone “touching” them since Purchase Orders were flagged as received by the receiving locations across North America. Non-PO invoices were getting automatically routed to reviewers and approvers based on business rules set-up in the System. Since the shutdown was anticipated, employees, including Accounts Payable Processors, were told to bring their laptops home. As long as employees had electricity and access to the Web, they could still perform tasks.
As mentioned earlier, this all happened within a week of a quarter-end. Would your Accounts Payable organization be able to find all Non-PO invoices that needed to be processed or accrued within minutes or would they need to rifle through stacks of paper? Since the invoices were in the workflow system, we were able to use Search Functionality to find the most critical invoices. Those that could be were approved in the Workflow System then electronically uploaded into the ERP and processed in time for month-end reporting. A report of those that could not be posted by month-end was easily created and sent to the General Accounting team for accrual purposes. There was no delay in the month-end reporting on the part of Accounts Payable.
The following week, we still had more unprocessed invoices in the Workflow System than our normal baseline numbers. Fortunately, there was still time before the newer invoices were due. Using the Search Functionality available in the AP Workflow system, it was easy to find unprocessed invoices by anticipated due dates. Whether the invoices required “manual” matching to the PO’s or follow up on exceptions with reviewers and approvers, the tasks were much easier to manage within AP Workflow Software.
Yes, some overtime hours were paid out but by the end of that second week, we were back to our normal baseline numbers.
Is your Accounts Payable department still a manual operation? How long would it take for you to recover from a “Disaster”? Whether your AP Operation is hit hard with illness or the building is damaged, do you have a plan? Have you thought about Accounts Payable Workflow Software as a Service? Maybe you are intimidated by the subject.
Ask for help!
New England Document Systems has the experience, and the resources to assist you; from answering your questions about the subject to helping you to implement a system. Contact us do 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.