For Accounts Payable to become more efficient and effective, they often must lead the charge and drive continuous improvement throughout the purchase-to-pay (P2P) end-to-end process.
Common pain points in Accounts Payable automation
A logical first step in fixing and optimizing the P2P process is to identify and prioritize pain points. They can often be highlighted by identifying the main inhibitors to processing invoices quickly without interruptions. The below illustration highlights the most common pain points:
Processing exceptions
- Suppliers
- Requisitioners
- Buyers
- Receivers
|
Manual effort
- Data input
- Follow-up management
|
Interruptions
- Supplier inquiries
- Buyer, Requisitioner, Receiver interactions
|
Spend control
- Poor PO compliance
- Lack of analytical tools
|
Month-end and projects
- Closing bottleneck
- No time for projects (e.g., DPO)
|
Workforce management
- Work-sharing challenges
- Difficulty evaluating individual performance
|
Leading practices in Accounts Payable transformation
A useful next step in optimizing P2P is to identify and prioritize leading P2P practices that make sense to implement in your organization. Take a holistic approach and consider improvement beyond “process” to include organization and technology. The graphic below provides the most common leading practices across several improvement dimensions. Highlighted are those we believe drive the most impactful and lasting improvements.
Technology and date
|
- Maximum systems integration
- ERP business rules and workflow to manage exceptions
- Intelligent OCR, RPA, ML & AI
- Invoice processing automation
- Semi-automated master supplier data management and exceptions management
- Spend control analytics
- Implemented supplier portals
|
Process, control, performance
|
- Laser-focus on straight-through-processing and exceptions improvement
- Strict policy controls — Standardization, PO compliance, return-to-sender
- Focus on total cost per invoice first
- Start measuring spend control
- Measure against self and benchmarks
- Deploy daily dashboards for team performance
|
Organization and talent
|
- Continuous improvement team & formal methodology
- Cross-organizational alignment — global process owner
|
Workday configuration
|
- Unify P2P approval process — All business units should follow the same approval process
- Simplify approval process — 3 approvals, or less, per transaction is ideal as it maintains speedy transaction processing
- Minimize number of "touches" per transaction — An approved requisition shouldn't need to re-route for approvals when its downstream PO is created unless there's been a change outside of tolerance
- Include match tolerance rules to support invoice exception process
|
For Accounts Payable to become more efficient and effective, they often must lead the charge and drive continuous improvement throughout the purchase-to-pay (P2P) end-to-end process.
Common pain points in Accounts Payable automation
A logical first step in fixing and optimizing the P2P process is to identify and prioritize pain points. They can often be highlighted by identifying the main inhibitors to processing invoices quickly without interruptions. The below illustration highlights the most common pain points:
Processing exceptions
- Suppliers
- Requisitioners
- Buyers
- Receivers
|
Manual effort
- Data input
- Follow-up management
|
Interruptions
- Supplier inquiries
- Buyer, Requisitioner, Receiver interactions
|
Spend control
- Poor PO compliance
- Lack of analytical tools
|
Month-end and projects
- Closing bottleneck
- No time for projects (e.g., DPO)
|
Workforce management
- Work-sharing challenges
- Difficulty evaluating individual performance
|
Leading practices in Accounts Payable transformation
A useful next step in optimizing P2P is to identify and prioritize leading P2P practices that make sense to implement in your organization. Take a holistic approach and consider improvement beyond “process” to include organization and technology. The graphic below provides the most common leading practices across several improvement dimensions. Highlighted are those we believe drive the most impactful and lasting improvements.
Technology and date
|
- Maximum systems integration
- ERP business rules and workflow to manage exceptions
- Intelligent OCR, RPA, ML & AI
- Invoice processing automation
- Semi-automated master supplier data management and exceptions management
- Spend control analytics
- Implemented supplier portals
|
Process, control, performance
|
- Laser-focus on straight-through-processing and exceptions improvement
- Strict policy controls — Standardization, PO compliance, return-to-sender
- Focus on total cost per invoice first
- Start measuring spend control
- Measure against self and benchmarks
- Deploy daily dashboards for team performance
|
Organization and talent
|
- Continuous improvement team & formal methodology
- Cross-organizational alignment — global process owner
|
Workday configuration
|
- Unify P2P approval process — All business units should follow the same approval process
- Simplify approval process — 3 approvals, or less, per transaction is ideal as it maintains speedy transaction processing
- Minimize number of "touches" per transaction — An approved requisition shouldn't need to re-route for approvals when its downstream PO is created unless there's been a change outside of tolerance
- Include match tolerance rules to support invoice exception process
|