Account payable invoice processes often face the challenge of managing long and complex invoice approval workflows, which can lead to delays in payments and an overall inefficient process that impacts a company’s bottom line.
As a CFO, it is important to have an effective strategy for improving your accounts payable workflow so you can streamline the entire process, save time, reduce costs, and ensure accuracy in all payments.
In this article, we will discuss the various ways you can improve your invoice approval workflow in Accounts Payable to keep on top of critical processes while reducing errors and increasing efficiency.
Account Payable Invoice Process
So, before we dig into how to improve the accounts payable invoice process, let’s quickly review what it is.
Accounts payable invoice processes involve verifying and approving invoices from vendors for goods or services received by a company. This includes creating an accurate record of payments made, ensuring that any bills related to an invoice are processed correctly, and preparing payment documents for the vendor.
The accounts payable invoice workflow consists of several steps, including invoice receipt, coding, review and approval, payment authorization, and finally payment processing. It is important to ensure that each step in this process is accurate, timely and efficient in order to avoid any delays or errors.
Essential Steps to Streamline the Invoice Approval Process
Now that you understand what the accounts payable invoice process entails, let’s discuss some steps you need to take before and during the process in order to improve it.
1. Identify Challenges with the Current Accounts Payable Process
Traditionally, the accounts payable process has been a manual and time-consuming task that involves extensive paperwork and manual data entry. The lack of automation leaves room for human error, mismanagement of invoices, and delayed payments, causing headaches for both vendors and the company.
For example, without automation, the accounts payable team may need to manually route and approve invoices, which could potentially delay payment, incur late fees, and damage vendor relations. Additionally, manual data entry can lead to mistakes, resulting in overpayments, duplicate payments, or payments sent to the wrong vendor.
Therefore, it is important to identify any inefficiencies or errors within the current accounts payable process in order to make improvements.
2. Evaluate Your Current Technology to Determine What Needs Improvement
Once you have identified any challenges with the current accounts payable process, you can begin to evaluate your current technology and determine what needs to be improved. Many companies are turning to automation solutions in order to streamline their accounts payable processes, reduce errors, and increase efficiency.
Automated AP software can help simplify invoice entry and approval processes, automate data entry, and provide real-time insights into payments. By using automation, companies can reduce manual errors, decrease costs associated with late payments, and improve inventory tracking.
Additionally, automated AP solutions can help manage complex invoice approval workflows by providing visibility into the payment process from start to finish. This helps ensure that invoices are approved in a timely manner, and any payments are made accurately and on time.
3. Create an Effective Strategy for Improving Your Accounts Payable Process
Now that you have identified the challenges and the current technology currently in place, it is time to create an effective strategy for improving your accounts payable process.
It is important to look at the big picture and understand how all of the steps in the process work together. For instance, you may need to changes how invoices are entered into the system or streamline how invoices are routed for approval.
You may also need to look at how data is entered and managed, or consider introducing automated payments solutions like ACH or virtual cards. Additionally, you should establish a clear policy for when and how payments are made in order to ensure that vendors are paid on time.
Start by creating a detailed plan that outlines how you will implement the changes. This should include goals, timelines, and KPIs for tracking progress. Additionally, it is important to ensure that all stakeholders involved in the accounts payable process are on board with the changes and understand their roles in making them happen.
Once you have created your plan and outlined the steps needed to implement it, you should create a timeline for when each step needs to be completed. This will help keep everyone on track and ensure that deadlines are met.
Steps To Improve Accounts Payable Invoice Process
Now that you have a basic understanding of the accounts payable invoice process, let’s explore some ways to improve it.
Automate Invoice Entry
You can save time by automating the data entry step of the process, which involves entering invoices into your accounting system for review and approval. Automated invoice processing software can quickly and accurately capture data from paper invoices, eliminating manual data entry errors.
Transform your AP processes with Decision Engines InvoiceIQ, and enjoy the savings that come from automating invoice entry! This intelligent automation solution quickly digitizes multi-layout invoices worldwide with up to 85% accuracy. Not only can it learn new vendor formats as needed, but it also creates a seamless flow of data between vendors, systems and teams – all without manual data entry.
Streamline Approval Workflows
You can also streamline the approval process by setting up an automated workflow that allows for easier invoice routing and tracking throughout the organization. This ensures that each step of the process is properly documented and tracked, eliminating delays due to miscommunication or paperwork errors.
Utilize Data Analysis Tools
Using data analysis tools such as dashboards and reporting can also help you gain insights into invoice performance in real time, allowing you to identify any potential problems or areas of improvement within your accounts payable workflow.
Invest in Training & Education
Finally, investing in training and education for your accounts payable staff can help ensure that all invoice processes are being followed correctly and efficiently. This can include online courses that cover basic accounting terminology or more advanced topics such as auditing or fraud prevention.
Improving your accounts payable invoice process can be a daunting task, but with the right strategy and technology in place, you can create an efficient system that supports your organization’s growth.
Automating data entry, streamlining approval workflows, utilizing data analysis tools, and investing in training & education are all important steps to take toward optimizing your invoice process and improving overall performance. With the right approach, you can ensure that your accounts payable team is running smoothly and efficiently – freeing up valuable time for other tasks!