Accounts Payable Process Assessment Service
Corporate executives are under increasing pressure to strengthen controls, drive out costs and increase efficiency in the back office. Successes have been achieved in some areas, but not all. Nowhere is this truer than Accounts Payable. Why have Executives hesitated to automate AP when it is fraught with the exact characteristics automation is relied on to solve?
Accounts Payable Automation Is the Answer | The Devil Is in the Details
Automation is the answer. But successful automation requires a clear, in-depth understanding. As the old adage goes, "the devil is in the details." Examining the current processes and day-to-day practices as well as the business reasons behind them is the first step. Invoices of all kinds come into your organization and get paid so something is working. Wouldn’t you like a better understanding of how?
Archive Systems' Accounts Payable Process Assessment is the first step. In order to keep your eye on the larger goal of a paperless, fully automated and auditable solution, someone has to get dirty; roll up their sleeves and sift through particulars and nuance. ASI Specialists know how to work with executives, AP Managers and processors, and illustrate the current processes that keep your Accounts Payable flowing; describing not only how things work in your AP department works but why. The Accounts Payable Process Assessment Service provides you with an in-depth analysis of your AP procedures in order to help make the transition to an automated, paperless environment.
What You Receive from the Accounts Payable Process Assessment Service
The ASI Specialist performs a thorough analysis, examining how different types of invoices flow through your organization and get paid. This includes who gets involved, how many people touch an invoice, how often is an invoice copied, how often is an invoice mailed, who talks to vendors and why is the vendor calling, what is done in preparation for audits and how disruptive is that to everyday activity, how are liabilities determined at the end of each month, and the list goes on and on. ASI specialists have seen it all and understand why AP requires processes to evolve the way they do.
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Step 1 - Involve Stakeholders
The first step is to involve the people across your organization who participate in the Accounts Payable process. For example, in addition to the Finance organization, it is important to include representatives from the business units AP relies on for approvals, issue resolution and support.
Project Lead: The project sponsor, typically a Controller or other senior finance executive, assigns someone from Accounts Payable to work with the ASI Specialist, acting as the point person, making introductions and gathering data.
Finance Organization: This includes day-to-day practitioners from the Finance organization such as a Controller, AP Managers and Supervisors, Accounting Supervisors and processors.
Buyers, Approvers, Requestors: Approvers are often the weak link that requires AP to get “creative” because they work in different cities, buildings and departments. Accurate approval is crucial to AP doing their job, yet they wield little or no authority in getting what they need in a timely manner – there is no upside to having liabilities sitting on someone’s desk out of sight and unknown to the accounting department. There is also value in streamlining AP to the extent that buyers can negotiate discounts for fast payment.
Information Technology: This includes a representative from the staff that supports the organization’s financial information system.
Step 2 - Gather the Data About Accounts Payable Processes
The ASI Specialist works with the Project Lead to gather key facts and data points as well as the standard and exception handling processes.
Key Facts and Quantitative Data: The ASI Specialist and the Project Lead gather key facts and quantitative data such as:
Number of Invoices processed monthly
Types of disbursements (i.e., purchase order, non-purchase order, merchandise or inventory, expense, immediate payment requests, travel & expense, negative invoices or adjustments)
Distribution of vendors to the number of invoices
AP organizational structure, roles and responsibilities
Safeguards against errors such as duplicate invoices
What current systems are used for 3-way match (if any)
Use of electronic versus paper invoices
Invoice Processing Flows: The ASI Specialist interviews the stakeholders both on site and over the phone to review the process and elicit details regarding issue resolution, exception handling and identify persistent friction points: points that reveal a lack of programmatic audit trail to enforce regulations and corporate policies and inefficient use of resources to accomplish the tasks. Gathering this information is an iterative process to confirm the data and ensure an appropriate level of detail has been learned.
Step 3 - Document the "Current State" of Your Accounts Payable Processes
The ASI Specialists will document the current state, creating both narrative and process flows. This too is iterative, confirming and validating with the Project Lead that the information is accurately presented.
Step 4 – Present the Findings
The formal document is presented first to the Project Lead for confirmation and validation, and any changes with a focus on identifying the opportunities for improvement will be made.
The ASI Specialists and Project Lead then present the findings to the Project Sponsor.
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