Accounts Payable Operations – Options for Improvement: Part 1

By NE Docs | August 11, 2016

Accounts Payable Operations - Options for Improvement

All vendor invoices and other payment requests are legal documents. Not only do they represent funds to be paid but they also support the costs and expenses of the company.

How many different people touch the invoices before they are processed by Accounts Payable?

What additional details or documents are attached to an invoice?

Does your company have a document retention period? If so, where are they stored? Are they protected from temperature and humidity? How easy is it to access the documents?

You might want to think about creating an Accounts Payable Document Management Policy.

Let’s start from the time vendor invoices and other payment requests are delivered to Accounts Payable.

  • Does your company date stamp invoices and other payment request documents upon receipt? Have you considered this may not be needed for all invoices but should be considered for payment requests and some invoice categories in order to help identify root causes for late processing or payment of invoices? Weigh the benefits.
  • If coding and approval or exception handling are needed, how does Accounts Payable send the invoices out to the appropriate person? Copy and then send by interoffice mail or scan than email out? How is Accounts Payable keeping track of what has been sent out and returned?
  • At the very least, it is strongly suggested that the original invoices not be sent out. This is how invoices end up in the “Black Hole”, the place where invoices go never to be seen again. The original invoices should stay in Accounts Payable.
  • How are coding, approval, or exception handling details supplied? On the face of the invoice copy, on a separate document or a combination of both? Does the company have guidelines on how details should be supplied? How are the invoice copies sent back to Accounts Payable?
  • Once invoices are received or returned to Accounts Payable, assuming all needed details have been supplied, they are processed into the system. Now they need to be filed. Is this done on a daily basis?

Do you have the room to store all invoices, other payment requests and all attached details within Accounts Payable for the duration of your records retention period or is your staff running out of space? If stored in another part of the building, is access limited to only Accounts Payable? If not, files could “grow legs” without Accounts Payable being aware of it until the files are needed.

If stored off site, does the facility have temperature and humidity controls to safe guard your records? Is access limited to only authorized personnel from your accounts payable team?

  • What is the cost of managing then storing all of this documentation from the time of receipt to the end of the retention period?

Yes, a lot of questions have been asked here but have you considered how much time and effort it takes to manage the documents from the time of receipt to the end of the company’s retention period?

Creating a policy for managing, storing and retaining documentation can be time-consuming but once created, and enforced, the amount of time spent on the tasks of obtaining necessary information and processing vendor invoices, then filing, storing, retaining and pulling documents for research, audit or litigation can be reduced.

Another option is to implement an Accounts Payable Automation solution which would help you manage documentation and would also streamline the following:

  • Automatically routed Non PO invoices for coding and approval without Accounts Payable being involved.
  • The automation of Purchase Order invoice matching to PO’s and related goods receipts.
  • Ease in routing exception invoices to the appropriate party.
  • Storage and retention of audit trails for each document.
  • Non Accounts Payable personnel could access records as needed without involving AP and without the risk of files getting misplaced.

Implementing an automated solution would allow Accounts Payable to focus on other more value added tasks.

Want more help? Just ask!

New England Document Systems has the solutions, experience and resources to assist you with anything from creating and implementing an Accounts Payable Document Management Policy to automating your Accounts Payable processing. Now all your company needs to do is 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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