ELIPO Archives - peoldigisol.com
Approx. Read Time 12 minutes
Posted by Team PEOL on July 19, 2021

Critical Importance of Automating Invoice Processing In The Post-Covid World

 

The COVID-19 pandemic has completely changed the way the world does business. A digital process management capability has become mandatory for survival, and businesses which do not have this capability will struggle to compete effectively. 

Most organizations have been forced to implement remote working (Work from Home) in a hurry in the current pandemic scenario, to ensure business continuity while also addressing employee safety. This sudden change of operating model without enough time for the employees and their managers to adapt is leading to challenges in key financial processes like accounts payables, leading to additional risks. 

Many businesses that have not yet transformed their existing manual processes are likely to face challenges especially in the accounts
management process in the post-pandemic world. 

 

With relatively lesser staff (or no staff) in office:

  • Invoices sent to offices are not being processed in time.
  • This has a direct impact on supplier relationships as this often leads to delays and errors in clearance of supplier payments.
  • Cashflow is affected
  • There is also an increased risk of fraud.

Though the need to process invoices digitally has always been there, it has accelerated in the post-COVID world. That said, most traditional accounting softwares and even ERP systems are not equipped for this transformation and still have a significant dependence on manual processes. This leads to significant challenges in accounting processes. This is especially true for the accounts payables process where we see challenges like the following which can lead to significant funds leakage and audit challenges:

  • Missing documents
  • Delayed payments
  • Incorrect numerical entries
  • Mismatched numbers on purchase orders, delivery challans and invoices 

With these challenges, organizations today need to rethink their Accounts Payable function to stay operational in the short run and sustain growth in the long run.

Automating the accounts payables process helps in eliminating most of these challenges and delivers the following benefits:

  • Seamless and accurate data capture: In an automated accounts payable system, once the invoice is received from the supplier by e-mail, it is scanned and invoice data is captured using OCR. This invoice data is automatically entered into the respective fields, and the data is validated and checked for accuracy. The automated accounts payable system checks the recent invoice against duplicate invoices, and verifies this against the defined rules. Once the appropriate checks are made, the invoice is automatically posted in the ERP for approval.
  • Faster processing: Automating the accounts payable process helps in providing the foundation for enabling faster processing of invoices. As invoice data is automatically captured, it reduces the probability of errors and reduces processing time significantly. If invoices are not cleared within a certain time limit, they can be automatically forwarded or routed to a higher authority.
  • Improved visibility: By analyzing the time and the key issues impacting the accounts payable process, organizations can unlock key insights by analyzing important factors such as procurement data, large deals or payments and cash flow analysis. For example, a large payment made to a supplier can qualify for a discount, which can significantly impact the cash flow and the profits over a period of time. Using analytics, this data can be used to negotiate larger discounts with key suppliers.
  • Handling exceptions: One of the most common problems for accounts payable professionals is to handle invoices that are received before the actual delivery of goods. This problem has escalated during the pandemic, due to logistical issues. This issue can be resolved if the automated accounts payable solution has the capability to handle exceptions. It can keep the invoice on hold automatically, till the actual goods are received. This validation stops the invoice from being entered into the system, and avoiding the need for correcting invalid entries. An automated accounts payable system can do automatic matching of invoices against the goods received, and prevent any possible issues. This is a key and must-have capability in the current situation where a majority of people are working from home.

In summary, organizations can look at the current pandemic situation as a huge opportunity to correct the inefficiencies in their accounts payable process by leveraging the benefits of automation.

If you want to avail the services of a trusted and experienced partner for automating your Accounts payable process, please feel free to write in to us at sales@peoldigisol.com

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

Approx. Read Time 12 minutes
Posted by Team PEOL on June 3, 2021

Are You Bleeding Cash In Your Accounts Payable Process?

Bleeding cash means losing money in a business over a period of time. Most businesses bleed cash, especially in the initial set-up days; but bleeding cash in the accounts payable process on an ongoing basis is something different.

Accounts payable is an important activity in a business organization. The success of a business organization in the long term depends as much on paying its debts in a timely manner as on collecting revenue.

In many organizations, accounts payable is still a manual process, which can create a huge number of issues like:

  • Possibility of manual errors.
  • Payment mistakes, double entry and double payment.
  • Delayed payment may also lead to payment of interest and penalty.
  • Late payments can cause reputation issues.
  • Suspension of business with the affected providers.
  • Suppliers causing stock-outs serious enough to halt production in some cases.

A manual accounting system also generates a lot of papers which have to be stored for a number of years. Every single purchase transaction may need multiple paper documents, which makes the task of retrieval or access difficult.

Even with accounting software or in case of some ERPs, there are other challenges.

  • Transactions have to be identified differently into different types. For example, large payments may qualify for a certain discount, while payments of small amounts will not qualify for the same benefits. So the two types of transactions have to be treated differently.
  • Purchase orders also require approval of various departments which will further delay the process.
  • Goods rejected sometimes get into the system too late by when the supplier is already fully paid and the company is unable to get refund especially if it is a non-regular vendor.
  • In case of certain suppliers, on account payments are made and it becomes difficult to match payments with the relevant invoices in absence of proper purchase orders.
  • In some cases, there is a mismatch of taking input tax credit for services and supplies received at the month end and credit is often lost as it is denied in the subsequent month.
The role of traditional ERP systems

The purchase order system in most ERP software products helps in digitizing and automating most of the steps in the accounting payable process to save time, money and efforts. Digitization of documents using a secure server to store all the documents giving the staff role based access to the documents can help in making the information accessible without compromising security. ERP systems also help in streamlining the accounts payable process by aggregating all the accounting functions in one centralized location.

However traditional ERP systems have some critical issues for the accounts payable process, like:

  • In many traditional ERP systems, the accounts payable process is not linked with the ERP system. As a result, both systems may or may not work from the same data. This hampers the ability to process invoices quickly via a single unified process, as the accounts payable process cannot leverage the business logic or data that is already present in the ERP. For example, an early payment can earn a discount from a supplier, which in turn, can have a big impact on cash flow. If there is no integration, then the organization cannot take advantage of such scenarios.
  • Even with all the automation of processing, there is a huge dependency on the quality of data input, which is often challenging if the data entry into the system is manual. Errors in the manual data entry can render the most complex ERP systems vulnerable to processing errors.

Seamless integration between the accounts payable process and ERP can offer immense benefits.

  • The integration enables real-time and bi-directional flow of data and allows smooth execution for all invoices. For example, to ensure that all invoices are paid correctly, the accounts payable department can perform three-way checking to see if the invoice matches the purchase order in the ERP, and if the goods or services were delivered.
  • Enterprises gain the ability to process all incoming invoices from any location as the accounts payable process is integrated with the backend ERP system.

In an automated accounts payable system, the invoice is received from the supplier by email, which is scanned, the invoice is recognized and validated and verified by OCR by reading invoice data. The invoice data is subsequently captured in respective fields. Data is reviewed for accuracy. The system checks for duplicates and the data is validated against the rules defined. This is then triggered for approval as part of the workflow, and once approved, the invoices are automatically posted in the ERP. 

This also helps in enabling more accurate financial reporting through complete visibility. Enterprises can also monitor across all steps of the invoice process and provide a complete audit trail. The ERP system must provide a user-friendly interface that provides access to a unified view of invoice data and documents. This enables all stakeholders to access invoices, resolve problems, and route invoices for approval.

The benefits of automating accounts payable process

The benefits of automating accounts payable process and integrating it with ERP are huge. Some of the benefits include:

  1. Adherence to compliance norm: Companies get full access to detailed invoice processing history at any time for auditing.
  2. Reduced processing time: Enables the organization to scan through multiple invoices in a short period of time. It also enables finance heads to monitor and streamline approvals. This significantly reduces manual operations and reduces processing time for invoices by a significant margin. Faster invoice approvals are now possible, as errors are detected and corrected before submission and invoice data is emailed to the inbox of the approver. Escalations can also be automatically routed to higher authorities, if the time taken for processing an invoice crosses a defined threshold.

  3. Improved cash management: Payment discounts from suppliers can make a big difference to the cash flow of any company. By automating the accounts payable process, organizations can succeed in earning early payment discounts from suppliers, by adhering strictly to required timelines. This can also help in eliminating any possibility of penalties.

  4. Improved vendor relations: As invoice processing is done faster and payments are made quickly, it can lead to a significant improvement in vendor relations. Suppliers can also track invoice and payment status through an online network. Payments are also released on time and discounts can be availed for early payments.

In summary, automation of the accounts payable process can significantly reduce paperwork and enable accounting staff to engage themselves in more strategic higher value activities. Working capital management can also be improved due to better visibility and improved efficiencies. In an era of increased digitization, it is imperative that organizations take active steps to automate the accounts payable process, as it is the foundation of your financial forecasting process.

If you want to avail the services of a trusted and experienced partner for automating your accounts payable process, please feel free to write in to us at sales@peoldigisol.com

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

How to measure your Digital Progress in your AP Automation journey?

Approx. Read Time 11 minutes
Posted by Team PEOL on October 14, 2020

How to measure your Digital Progress in your AP Automation journey?​

Before directly deep diving into the “measurement” of “progress”, I would like you to think about the larger context of which your project is a part of. This is because what you want to measure should be derived from the “program” point of view and not just the “project” or “task.” This is because most of the times “projects” and linked to “programs” and programs are linked to “transformation.”
Once the larger picture is clear to you, then start devising what you want to measure? How you want to measure? Who measures it and reviews it? What is the frequency of measurement? What do you do with the measured results?
Any digital transformation project will have the following Goals which needs to be measured. Source: Harvard Business Review- An Inflection Point for the Data Driven Enterprise, 2018.

All digital transformation projects aren’t successful. Many fail. I believe the most important reason for failure is the lack of management being unable to find the right balance between People, Process, Technology(PPT). Finding the right balance between PPT essentially answers the following questions correctly:
“What to automate?”, means you have identified correctly which process to automate.
“How to automate?”, means you have identified correctly what technology will be used to automate.
“How much to automate?”, means you have identified correctly what people will do and what technology will do in the same value chain.

Now let us look at the parameters(KPIs) which you should be measuring to track progress of your AP Automation Project. It is assumed that “continuous improvement” is there with focussed efforts to improve the current state of the newly automated process. I would like to classify the KPIs to be measured into two categories: Operational KPIs, Tactical KPIs. Below is an infographic illustration before I get into details of each of the KPIs. If you would like to know in details about the Operational KPIs to be tracked in AP Automation check out our Blog on “How Account Payable Automation helps in tracking the critical Process KPIs?

Ops KPI 1:

Cost Per Invoice Processed

Ops KPI 2:

Average Cycle Time of Invoices Processed

Ops KPI 3:

Early Payment Discount Missed

Ops KPI 4:

Wrong Payments against invoices

Ops KPI 5:

Hardcopy invoices received

Ops KPI 6:

Volume of Invoices Processed

Ops KPI 7:

Supplier Relations

Tact KPI 8:

Return on Investment (ROI)

Tact KPI 8:

User Engagement

Ops KPI #1:  Cost Per Invoice Processed

Here you calculate all your costs like people cost, hardware cost, software cost, infrastructure cost and then divide by the total number of invoices processed.

Recommended to review this on a quarterly basis.

Ops KPI #2: Average Cycle Time of Invoice Processed

Here you consider the time span of when an invoice comes into your system till payment is made to the supplier against the invoice. You take an average of this time span of all the invoices which comes in for a specific week, month or quarter.

Recommended to review this on a quarterly basis.

Ops KPI #3: Early Payment Discount Missed

Once you have automated your AP process it is easy for you to electronically access the early payment discount for each of the invoice under process and in some cases it may automatically appear in the console of the AP staff. Hence, if your organization has made a decision to avail the early payment discount, in that case there should not be any missed opportunity. In other words the missed opportunity should be zero.

Recommended to review this on a quarterly basis.

Ops KPI #4: Wrong Payments against invoices

This generally happens by two means- payment against duplicate invoices, more or less payment against invoices. Before AP automation the number of wrong payments done surely existed but after AP automation these cases are expected to reduce significantly. 

Recommended to review this on a quarterly basis.

Ops KPI #5:  Hardcopy invoices received as a percentage of electronic invoices

Unless we track the source of hardcopy invoices we cannot reduce it eventually. Our data capture will show that some specific suppliers send paper invoices more than others. Work with those specific suppliers to reduce the number of paper invoices in the coming months.

Recommended to review this on a quarterly basis.

Ops KPI #6:  Volume of Invoices Processed

One may argue that after automation this may not be important as capacity to process invoice is inherently increased. However, I would agree to it only if the level of automation achieved is close to 100%. Till then this KPI is still important as this will help you in capacity planning.

Recommended to review this on a quarterly basis.

Ops KPI #7:  Supplier Relations- Number of supplier enquiries, discrepancies and disputes

AP automation helps you to reduce number of supplier enquiries, discrepancies and disputes. Obviously, the lower this figure, the better. 

Handling supplier enquiries, discrepancies and disputes ties up valuable resources which will impact AP efficiency negatively. A research by IDC shows that there is a reduction of 45-50% in the number of questions from suppliers to the AP department post implementation of AP automation. You should track this against this benchmark.

Recommended to review this on a quarterly basis.

Tact KPI 8: Return on Investment (ROI)

When you had made a Business Case for the implementation of AP Automation you might have made the Break Even and also 5 year ROI calculation. If you want to know how to make a detail ROI calculation, visit our Blog, “How to measure your ROI on your AP Automation?” 

Recommended to review this on a yearly basis for 5 years.

Tact KPI 9: User Engagement

You might have heard of terms like “User Interface(UI)” and “Employee Engagement”, but here I am tempted to coin a new term “User Engagement.” Of course the Users in the context of AP automation are Employees. I have already stressed upon the importance of finding a right balance between People-Process-Technology(PPT) in successful AP automation earlier in this blog. Here my focus is on the People i.e the Users. Unless the Users accept it and see benefit, the AP automation implementation is going to be slow and sometimes it may fail also.

Keep a track of, are you getting constructive suggestions from Users to improve the current process or you are getting complains about the AP automation. If you are more serious you can conduct a one time anonymous survey to seek critical feedback and then implement those as process improvement.

Recommended to review this on a quarterly basis.

Don’t stop Tracking your Progress
Once you have implemented AP Automation solution in your department, don’t relax. You have to continuously monitor the progress for the following two reasons: Are you continuing to reap the ROI benefits which you had initially envisaged? Is the change which you have brought in by automating your AP processes sustainable?
“The biggest limitation (of digital KPIs) is the lack of a clearly defined digital ambition,” or strategy, says Gartner analyst Paul Proctor. “Having a clear idea of your digital ambition will give you some ideas of what you should be measuring to measure your progress. You can’t measure something you don’t have a measuring stick for.”
Select the right set of parameters which you want to track and review them in a timely manner to measure your progress. Surely success will be yours! 

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

How AI and RPA is used in AP Automation to Maximize Business Value?

Approx. Read Time 14 minutes
Posted by Team PEOL on October 14, 2020

How AI and RPA is used in AP Automation to Maximize Business Value?

Technologies like AI and RPA in isolation does not mean much to a Finance function or a Business organization at large. One has to have a deep understanding of one’s current processes, re-engineer the current processes on “lean management principles” and then automate the re-engineered process to realize the business value. The business value can be in terms of cost savings, improved quality, improved compliance, improved customer satisfaction.

In spite of lot of hype and investments many AI and RPA project implementations does not yield the desired ROI and even sometimes it fails. I strongly believe that striking the right balance between People, Process and Technology is the key to successful implementation and realize the ROI.

How Artificial Intelligence can be used for Finance Operations?

According to finance leaders responding to the Gartner 2020 Agenda Poll, shows that the top three initiatives of CFOs and Finance leaders are going to be:

  • Finance analytics
  • Finance organization strategy and structure
  • Finance technology optimization

The number of companies adopting AI has increased from 10% four years ago to 37% in 2019, according to Gartner’s survey of 3,000 CIOs. Though the adoption rate is increasing there has been cases reported by CFOs and CIOs that they have not been able to realize the ROI due to implementation issues.
AI can be used abundantly in processes which involve auditing of financial transactions. Also when it comes to analyzing an enormous number of pages of the tax changes, AI can be of great help. It can be expected in the near future to see companies relying on AI to make significant firm related decisions. AI also has the capability to identify how customers are going to react to various situations and problems. Artificial Intelligence is going to help people and firms make smarter decisions at a very quick pace.
Now let us see how AI has transformed the Finance Industry.

1. Risk Assessment: Using AI multiple documents can be scanned, structured and un-structured data can be extracted, and the AI engine can recommend the Loan or Credit level which can be granted to an individual or a borrowing organization.


2. Fraud Detection and Management: AI can use past spending behaviours on different transaction instruments to point out odd behaviour, such as using a card from another country just a few hours after it has been used elsewhere, or an attempt to withdraw a sum of money that is unusual for the account in question. Another excellent feature of fraud detection using AI is that the system has no qualms about learning. If it raises a red flag for a regular transaction and a human being corrects that, the system can learn from the experience and make even more sophisticated decisions about what can be considered fraud and what cannot. This is a case of Machine Learning(ML).


3. Financial Advisory Services: An AI based financial advisory can help you make wise decisions related to your investments. Sometimes an human advisory may have own personal bias while advising, while AI will not have this bias. This can be your personal financial guide giving you advice on anything from investing your money in properties to buying a new car. 


4. Trading: Investment companies have been relying on computers and data scientists to determine future patterns in the market. As a domain, trading and investments depend on the ability to predict the future accurately. Machines are great at this because they can crunch a huge amount of data in a short while. Machines can also be taught to observe patterns in past data and predict how these patterns might repeat in the future.
AI can suggest portfolio solutions to meet each person’s demand. So a person with a high-risk appetite can count on AI for decisions on when to buy, hold and sell stock.


5. Managing Finance: An AI based application can be your Spend Analyst and advisory. It accumulates all the data from your web footprint and creates your spending graph. Advocates of privacy breaching on the internet may find it offensive but, maybe be this is what lies in future.

How Robotic Process Automation can be used in Finance Operations?

RPA is an application of technology, governed by business logic and structured inputs, aimed at automating business processes. Using RPA tools, a company can configure software, or a “robot,” to capture and interpret applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.
Let us consider a relatively simple example of RPA before we explore the full potential of RPA.
Enterprises are still struggling with a lot of manual interventions to undertake reconciliation of book of accounts. By using RPA, your GST reconciliations could be significantly simplified. The bot downloads the GSTR 2 statement, downloads the statement from your ERP, does the required formatting for reconciliation, reconciles the information based on the various rule sets defined and sends the follow up communications to both, the internal teams as well as to suppliers.
This above solution ensures a hassle free and error proof way for any enterprise to match their GST records using RPA.
RPA provides organizations with the ability to reduce staffing costs and human error. David Schatsky, a managing director at Deloitte LP, points to a bank’s experience with implementing RPA, in which the bank redesigned its claims process by deploying 85 bots to run 13 processes, handling 1.5 million requests per year. The bank added capacity equivalent to more than 200 full-time employees at approximately 30 percent of the cost of recruiting more staff, Schatsky says. (Source: CIO.com)
Walmart, Deutsche Bank, AT&T, Vanguard, Ernst & Young, Walgreens, Anthem and American Express Global Business Travel are among the many enterprises adopting RPA.
Walmart CIO Clay Johnson says the retail giant has deployed about 500 bots to automate anything from answering employee questions to retrieving useful information from audit documents. “A lot of those came from people who are tired of the work,” Johnson says.
Enterprises can also supercharge their automation efforts by injecting RPA with cognitive technologies such as Machine Learning(ML), speech recognition, and natural language processing(NLP), automating higher-order tasks that in the past required the perceptual and judgment capabilities of humans.
Such RPA implementations, in which upwards of 15 to 20 steps may be automated, are part of a value chain known as intelligent automation (IA).
By 2020, automation and artificial intelligence will reduce employee requirements in business shared-service centres by 65 percent, according to Gartner.
Spending on RPA tools will top $1 billion in 2019, but will ratchet up to $1.5 billion by 2020, according to Forrester Research, which says that 40 percent of enterprises will operate automation centres and frameworks in place this year.
Even if CIOs navigate the human capital conundrum, RPA implementations fail more often than not. “Several robotics programs have been put on hold, or CIOs have flatly refused to install new bots,” Alex Edlich and Vik Sohoni, senior partners at McKinsey & Company, said in a report.
The platforms on which bots interact often change, and the necessary flexibility isn’t always configured into the bot. Moreover, a new regulation requiring minor changes to an application form could throw off months of work in the back office on a bot that’s nearing completion.

5 Ways how AI and RPA is used in AP Automation

1

Prevent Late Payments

2

Increase e-Invoices

3

Avail Early Payment Discounts

4

Resolve Process Bottlenecks

5

Improve Supplier Relationships

1. Prevent Late Payments: Intelligence built into AP automation solutions scans historical trends and identifies patterns, then aggregates the data into predictive analytics that predict the probability of on-time payments in the AP process. AP teams will easily see invoices at risk for late payment and be able to drill into the details to determine what actions need to be taken to prevent late payments.


2. Increase e-Invoices: Not all suppliers send the invoices in a format which are readily accepted by the invoice processing organization. Some supplier’s invoices would cause more rejection or exceptions than other suppliers. This can be captured, analyzed by the automated system. Further work can be done with those specific suppliers and encourage them to send e-Invoices which can be easily processed.


3. Avail Early Payment Discounts: A dashboard will show the available early payment discounts available on the invoices at any point of time. The company can take a decision of availing it or not depending upon the availability of Working Capital. If any early payment discounts were missed, those cases can be rectified for upstream issues so that they are not missed in the future.


4. Resolve Process Bottlenecks: Analytics related to processing times enable AP to better understand why certain invoices take longer to process, have more exceptions than others, and tend to get delayed in the workflow. With this data, they will be able to detect and resolve process bottlenecks and streamline back-office functions.


5. Improve Supplier Relationships: A bot can respond to typical supplier queries like, “Is my invoice accepted?”,”Is my invoice approved?”, “Is my payment done today, so that I can check in my account?” etc. Further, automated AP helps in timely and accurate payment to suppliers. This in turn improves supplier relations. Better supplier relations helps AP and Procurement teams negotiate better payment terms with the suppliers.

Road ahead
AI is providing timely and deeper insights for better decision making. RPA is helping to automate some of the business processes which were being done previously by humans. 
Solutions delivering advanced analytics are improving every day to integrate more machine learning, predictive analytics and artificial intelligence so users can make the most of their financial data. Organizations have already moved ahead from RPA to Intelligent Automation(IA) where multiple bots are being used to automate multiple processes in the same value chain. These advancements may help AP department from being viewed as a “cost centre” to a “profit centre” in the near future.
CIOs and CFOs have to find the right balance between People, Process, Technology to maximize the business value from automation.

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

Will AP Automation make my job redundant? Here are reasons you don’t need to worry

Approx. Read Time 10 minutes
Posted by Team PEOL on October 14, 2020

Will AP Automation make my job redundant? Here are reasons you don’t need to worry

Few months back I met my friend who works as a Customer Relations Manager in a large bank. As I am not from a banking industry, I was curious to know from him about how banking operations happens in his bank and branch. He said that few years back it used to be very chaotic and stressful as many of the processes were manual, but now it has significantly improved as many of the processes are streamlined through automation.

I further asked him, “did some of the executives who were involved in manual data entry and handling paperwork lose their job?”

He said, “largely no, however as you know there are always few people at the bottom of the performance stack who did not make the cut as the bank found it difficult to re-skill them.”

I further asked him, “How operations have changed after your bank has automated some of the banking processes?”

He said, “since the processes are streamlined now, customer queries have gone down and customer satisfaction has gone up. As a result of this our branch has seen a significant increase in the number of new customers over the past few years and there is an increase in the fund our branch is handling now.”

After meeting my friend from the banking industry, I came back home and continued to think, “how automation has changed the industry”, “what impact will it have on the existing people?”

Suddenly then, an example came to mind from the IT industry which I want to share with you.

You may recall several years back when Software Testing used to be a manual process. A big push was given by the IT industry to automate software testing.

I remember lot of discussion used to happen on coffee tables about the software testers becoming redundant after software testing will be automated. In fact some of the software testers in my team expressed their concern about their skills becoming redundant. But I also remember that most of the software testers re-skilled themselves with the help of the organization or with their own initiative.

A natural progression of re-skilling or up-skilling, whatever you may like to call it as, was to develop software development skills. So what happened then? The market expanded and the demand for software developers increased and all these re-skilled resources got absorbed.

At this juncture universally acclaimed (Charles) Darwin’s Theory of Natural Selection comes to my mind, which states:

“…. that nature selects organisms that have features favourable for their survival, while eliminating inferior species. Natural selection is a key to the origin of new species from the existing ones.”

ATMs were supposed to do away with cashiers at banks but both coexist today.

There are other examples like manufacturing automation. I will leave it at that for you to connect the dots.

Make sure you are at the right place at the right time with the right skills!

The above examples brought the following questions to my mind:

“Is automation a foe or a friend as it nudges people to come out of their comfort zones and compels people to develop new skills ?”

“Does industry automates some of their operations to make our job redundant or it creates new opportunities for the industry and it’s people?”

According to a survey on the Future of Jobs in India by EY and Nasscom:

  • there will be a change in workforce mix by 2022 due to increased adoption of technologies.
  • By then, 9% of the workforce will be deployed in new jobs that do not exist today,
  • 37% will be in jobs that have radically changed skillsets and
  • 54% will fall under the unchanged jobs category.

Experts also believe that the impact of automation is no longer restricted to junior and middle level as creation of new categories of businesses is leading to senior-level jobs being redesigned with rapid adoption of AI, robotics, blockchain, etc.

Let’s come to the context of Accounts Payable(AP) Automation. Assuming that the entire AP process is end-to-end automated, how the AP executives can take advantage of this?

Assume that post automation the AP executives are freed from mundane time consuming manual work. Some of the areas where the existing AP executives can add strategic value to their organization and also themselves are as follows:

Business Advisors

Financial Analyst

Control Specialist

Procurement Specialist

AP Executives can become Business Advisors

You will have much more time to engage with your business owners and clients as a business advisor, offering insights on how to bolster your company’s balance sheet and help the company perform better.
You will have the opportunity to see the big picture of what information your company holds and how it can be used to make smarter investments, find new growth and operate more efficiently. You will also find more time to focus on tax consulting, infrastructure related decisions, and corporate mergers and acquisitions.

AP Executives can become Financial Analyst

As a financial analyst, you will have access to financial information on dashboards – that few others in the company have – that will give you a comprehensive view of how the company is doing.
Seeing the whole corporate financial picture, you will be able to spot early warning signs of potential problems and opportunities to shift directions.

AP Executives can become Internal Control Specialist

You could be asked to prepare internal audits for your company in which your skills as an accountant would be needed to track financials and regulations. During this process, you should take the opportunity to upgrade your company’s risk management programs and promote continuous budget reviews.

AP Executives can become Procurement Specialist

You can add value as a procurement specialist by renegotiating contracts with suppliers, look for variations in pricing between suppliers across the organizations and implement unified pricing, advise the business users on financial position of suppliers.

“While traditional services will continue to remain an important part of what accountants do, the focus will be different. The biggest benefit of using artificial intelligence (AI) instead of manual bookkeeping, is probably the time it frees up for accountants to provide strategic advice to businesses and organisations.
Real-time accounting can help small to medium businesses to take decisions when needed instead of waiting for months for financial statements.”

~ says Jeanne Viljoen, Project Director: Practices at the South African Institute of Chartered Accountants (SAICA).

Every Cloud (Automation!) has a Silver Lining

The good news is that while technology is making inroads at a rapid pace and as new job profiles get created, there is an increasing demand for professionals trained in new skills who can help companies navigate through the transformation.
Automation trends are going to be great opportunities for accountants to develop new skills, add more value to their businesses and advance their careers. Take this special opportunity to sharpen your skills to improve your business value.

“The value of having an accountant – either outsourced or in house – is not in the data entry but in what they can add to your business. A good accountant operates as a strategic partner in your business, offering insight into what the financials mean.”
~ Maree Caulfield,
www.Smartcompany.com.au/finance

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

Myths Causing Barriers to the Adoption of Digital Invoice Application

Approx. Read Time 11 minutes
Posted by Team PEOL on October 14, 2020

Myths Causing Barriers to the Adoption of Digital Invoice Application

When we try to bring in any “change” or “transformation” at large we have faced with multiple challenges. Some of these challenges are “real” and some of these challenges are “unfounded” or even “myths” which creates barriers to any change or transformation we are trying to bring in.
With my experience I would say that “myths” which causes barriers to any organizational transformation can broadly be categorized under any of the following categories: People, Process, Technology, Resources.
A Survey done for a sample size of n=729 across geographies including APAC by Harvard Business Review, 2018, “An Inflection Point for the Data Driven Enterprise- Pulse Survey” gives us an insight to differentiate between myths and realities. An extract from the larger table shows the following for Financial Services Industry.

One would have imagined that lack of funds or top management support would have figured in the top five barriers to transformation but it doesn’t. So what does it mean? Building a Business Case with ROI and getting Management approval is not as difficult as you think for a Digital Transformation project.
Now let us get into the context of Digital Invoice Application(DIA).

Myths causing barriers to the adoption of Digital Invoice Application(DIA)

Myth #1

Difficult to Build a Business Case

Myth #2

Too Expensive

Myth #3

Cloud Based Applications lacks Security

Myth #4

Moving to Cloud Consumes lot of Resources

Myth #5

Takes long time to Implement

Myth #6

Current Process is too Complex to Automate

Now let us look into each of the above 6 Myths and try to debunk them.
Myth #1: It is difficult to build a Business Case for Digital Invoice Application

When companies believe they cannot justify the cost of a solution, it is often because they are unable to quantify the cost of the current process in terms of time, effort and IT infrastructure costs like hardware and software. Hence it is important for you to know your current “cost per invoice processed.” Once you are able to calculate your current cost of invoice processed, you have to calculate the cost of invoice processed for your proposed Digital Invoice Application solution. Here you have to discuss with the solution provider to take inputs related to cost of implementation. A simplified version of the equation is as follows.

Current Cost per Invoice Processed

+

Future Cost per Invoice Processed

=

Benefits per Invoice Processed

An IDC survey shows that for a end-to-end Digital Invoice Application Solution the pay back period can be 5 months and a 5 year ROI can be 505%.

If you want to know more about how to calculate your ROI on your AP Automation Solution, see our Blog Post on “How to measure your ROI on your AP Automation?”  

Myth #2: Digital Invoice Application Solution is too Expensive

Most of the Digital Invoice Application Solutions are Cloud based and not on-premise Server based.
Solutions that offer end-to-end Digital Invoice Application solution using Software-as-a-Service (SaaS) and the “cloud”, require no upfront software or infrastructure purchases or recurring license maintenance. Choosing a Digital Invoice Application solution that is offered as a service allows all the users that are part of the business process to participate without having to pay expensive user-based license fees.
Normally Digital Invoice Application solution providers offer a flexible pricing model. You can choose a model which will help you optimize your cost.
With a true multi-tenant SaaS solution, you should expect functionality upgrades periodically based on best practices and input from your peers sharing the same core application platforms. All of this implies that you will reach your ROI significantly faster than otherwise.

Myth #3: Cloud Based Digital Invoice Application lacks reliable Security

The fear of Data Security and Frauds is not unfounded with the numerous cases which have been happening around us. Specially in the current situation which we are in 2020, it has been observed that Data Security threats and Fraudulence has increased exponentially.
PEOL’s Express Lane Invoice Processing Orbit(ELIPO) is hosted on AWS Cloud with AWS Security features. If you plan to procure Digital Invoice Application solutions hosted on lessor known Cloud service providers, involve your IT department to assess the security features. You may also ask them that weather the Security features meets specific international standards.
Note that Data Security threats and Fraudulence doesn’t come from outside the organization only but it comes from within the organization also. Hence, access controls specially related to Approvals and Payments can be carefully controlled using the Digital Invoice Application. You can also configure the business rules using the Digital Invoice Application. PEOL’s ELIPO has customizable Approval Work-flow and also Configurable Business Rule engine.

Myth #4: Moving to the Cloud takes excessive company resources

Many companies licensing cloud-based Digital Invoice Application solutions need to involve their IT departments minimally to deploy the solution. Generally, IT is required for enterprise resource planning (ERP) integration, just as it would be for any on-premises solution. However, cloud-based AP solutions do not require customers to perform time-consuming installations or deploy IT resources to adapt existing hardware to new applications.
Upgrades and enhancements are made in the cloud and can be used immediately, without waiting for lengthy downloads to a company server.
In fact, many early adopters cite the lack of IT involvement as one of the key reasons they could move forward with the project. Most SaaS solutions offer around-the-clock tech support via the web, email, or telephone.

Myth #5: Digital Invoice Application Solution takes a long time to implement

Many Digital Invoice Application Solutions may have out-of-box Integration Features with your existing ERP. In this case the implementation time is less.
In case you decide to procure and implement a Digital Invoice Application solution which does not have out-of-box integration features you may need to do some additional work. Make sure you form a cross functional team comprising of your IT department, Account Payable function and the personnel from your solution provider. Further make a detail project plan related to deployment, migration, testing etc. and a project review mechanism to track progress. Focussed execution will decrease your implementation time.

Myth #6: Existing Invoicing Process is too Complex and company Specific to Automate

If you are processing invoices manually which is predominantly paper based then your process is already complex and painstaking to say the least. My experience is that such processes becomes more complex with every passing year. I have seen organizations re-engineering their current processes after looking through the prism of “lean management” before implementing ERP or any other application. Hence this is the time you simplify your current process to make it more efficient before implementing a Digital Invoice Application solution.
Further, if your organization has been a part of any merger or acquisition then you may land up in a situation where your multiple locations are having different ERPs. Imagine the variety and complexity of your invoice processing. In such cases all these different ERPs of different locations can be integrated with one Cloud based Digital Invoice Application to streamline the invoice processing function.

Don’t get caught in the maze of Myths and Realities
As it is said that sometimes myth is a reality and reality is a myth, depending upon who is looking at it. Organizations have spent enough time in trying to navigate through this maze of myths and realities and lost valuable time. The time to act is now.
Progressive companies take decisions based on facts supported by Data and does not get bogged down by myths. There is lot of evidence out there to support the benefits of Digital Invoice Application in terms of time and cost. Do a ROI calculation and make a business case to implement a Digital Invoice Application. All the best!

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

How Account Payable Automation helps in tracking the critical Process KPIs?

Approx. Read Time 12 minutes
Posted by Team PEOL on October 14, 2020

How Account Payable Automation helps in tracking the critical Process KPIs?

Glad to see that you are exploring what are the critical KPIs you should track and how you can maximize your gain post your Account Payable Automation Solution implementation.
Once I was in a weekly team meeting and discussing about identifying and measuring some KPIs for one of our existing processes, I observed that I could classify three categories of employees in the room: one category comprised of employees who tend to say that what is the need for change as things seems to be going on well, second category seems to be sitting on the fence and waiting to be convinced, the third category I would like to call the enthusiasts as if they were waiting for this to arrive. Well, I had to do lot of campaigning for the coming two weeks to turn more people into enthusiasts by showing them what’s in for them in this change and how it links up to the organizational benefit.
Let me get back to the context of measuring KPIs for an AP Processes. Before the AP process was automated it would have been difficult to track and measure KPIs. Even if you wanted to do it, it was a manual tracking are reporting process. I have observed that a manual tracking and measuring of KPIs is time consuming, inaccurate and biased. Now if you have automated your AP process then you are creating digital data at every step of the process which you can use it to track, measure and report timely and accurately.

Why should you track accounts payable KPIs?

Tracking your Accounts Payable (AP) metrics is beneficial in many ways, but the ultimate aim is to measure and analyse results for improvement. Without tracking, measuring, and analysing your metrics on a regular basis, it will be difficult to identify AP areas that require change. Also measuring AP metrics will let you know if you are continuing to get the ROI which you had envisaged initially.

“ What gets measured, gets improved.”

~ Peter Drucker, Management Guru

What are the broad level AP Automation KPIs

Cost

Time

Quality

Supplier Relations

Often we measure KPIs related to Cost, Time, Quality but sometimes ignore Supplier Relations related KPIs

Accounts Payable(AP) team being a cost centre, management expects the functional head to reduce cost of operations and further do more with less. Hence most of the KPIs are generally derivatives of Cost, Time or Quality. However sometimes we ignore to measure the health of Supplier Relationship. I will try to give it a bit more attention in this blog than it normally gets.
Below I am recommending to track and measure the following seven critical process KPIs for your automated AP process.

KPI #1: Cost Per Invoice Processed

Here you calculate all your costs like people cost, hardware cost, software cost, infrastructure cost and then divide by the total number of invoices processed.

KPI #2: Average Cycle Time of Invoice Processed

Here you consider the time span of when an invoice comes into your system till payment is made to the supplier against the invoice. You take an average of this time span of all the invoices which comes in for a specific week, month or quarter.

KPI #3: Early Payment Discount Missed

Once you have automated your AP process it is easy for you to electronically access the early payment discount for each of the invoice under process and in some cases it may automatically appear in the console of the AP staff. Hence, if your organization has made a decision to avail the early payment discount, in that case there should not be any missed opportunity. In other words the missed opportunity should be zero.

KPI #4: Wrong Payments against invoices

This generally happens by two means- payment against duplicate invoices, more or less payment against invoices. Before AP automation the number of wrong payments done surely existed but after AP automation these cases are expected to reduce significantly. But still it should be tracked and reported.

KPI #5: Hardcopy invoices received as a percentage of electronic invoices

One of the basic goals of any digital transformation initiative is to reduce paper document based processes. This can be achieved by diligently working towards reducing the handling of paper, storing and archiving of paper, retrieval of paper when required. Unless we track the source of hardcopy invoices we cannot reduce it eventually. Our data capture will show that some specific suppliers send paper invoices more than others. Work with those specific suppliers to reduce the number of paper invoices in the coming months.

KPI #6: Volume of Invoices Processed

Tracking of volume of invoice processed is important from a capacity planning perspective. This is specially important for businesses whose nature of business is cyclical or seasonal. One may argue that after automation this may not be important as capacity to process invoice is inherently increased. However, I would agree to it only if the level of automation achieved is close to 100%. Till then this KPI is still important.

KPI #7: Supplier Relations- Number of supplier enquiries, discrepancies and disputes

If you agree that your success is dependent on your suppliers and partners then why not measure it and improve it. Hosting Annual Supplier Conferences to recognize a few Suppliers may be necessary but not sufficient to keep them motivated so that they continue to support you in your success.
I agree that measuring the health of “relationship” is not as easy to measure parameters like “cost” and “time” as these parameters can be easily hardcoded.
I would suggest to take up two initiatives to measure “indicators” which will give you a good idea of your state of Supplier Relations. Have a bi-annual written feedback (preferably anonymous) on key parameters and work on them to improve upon. I chose to leave it at that for now as it is beyond the scope of this Blog title.
Let me come back to the context of AP Automation. AP automation helps you to reduce number of supplier enquiries, discrepancies and disputes. Obviously, the lower this figure, the better.
Handling supplier enquiries, discrepancies and disputes ties up valuable resources which will impact AP efficiency negatively. If you consider the suppliers calling you repeatedly to know the status of their invoice payment as an irritant then it is an irritant for the supplier as well. A research by IDC shows that there is a reduction of 45-50% in the number of questions from suppliers to the AP department post implementation of AP automation.

Beyond the Basics

Recently I was reading an article on the use of Artificial Intelligence(AI) in Business Strategy. What it said was that the companies who will use AI better will be better placed in devising their business strategy. However, we all know that one of the key pillars of AI is collection of data: structured and un-structured.
When it comes to measuring AP performance, automation allows for the centralised data collection of all your payment data. The more you automate, the more data the system collects. Then advanced and predictive analytics gives you a full view of your organisation’s entire spend profile, meaning you get total insight, oversight, and hindsight into your AP operations.

Pro Tips
Pro Tip #1:

Using AP automation application, design your “Approval Work-flow” judiciously. You don’t need to have the same number and level of approvals for an invoice value of Rupees 10,000 and Rupees 100,000. Remember that waiting for approval is often a show stopper in any business process.

Pro Tip #2:

Using AP automation application, configure your “Business Rules” judiciously. Don’t raise an error report and route it for special approval for a PO to Invoice value mismatch of one Rupee or less. I have talked to AP executives who have been instructed by their management to do it and hence they have been doing it for years. This increases the cycle-time of invoice processed and effort hours. If this is not “penny wise pound foolish”, then what is?

Pro Tip #3:

Ensure that your AP automation application has a robust mobile approval feature. I have observed that approvers often travel and hence help them to provide their approvals faster and reduce the cycle-time.

Conclusion
AP automation application gives you a digital platform to capture data, analyze data, gain insights and take further actions to maximize business benefit. We have recommended seven KPIs which you should track along with some Pro Tips which should help you improve your bottom line of your department and your company at large.

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

How to Measure your ROI on your Accounts Payable Automation?

Approx. Read Time 12 minutes
Posted by Team PEOL on October 14, 2020

How to Measure your ROI on your Accounts Payable Automation?

Glad to see that you are actively considering to implement an Accounts Payable(AP) Automation Solution for your company. If you are working to build a Business Case to convince your management to get the project funding for your AP Automation project then calculation of Return on Investment(ROI) is an absolute necessity.

ROI is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment and shown as a percentage of increase or decrease in the value of the investment during the year in question. The basic formula for ROI is: ROI (%) = Net Profit / Total Investment * 100.

To fully understand the total costs and savings from automating Accounts Payable, you need to consider the entire set of activities that comprise the invoice-to-pay process. Automating AP creates an opportunity to reduce manual labor, improve tracking, strengthen security controls and optimize payment methods. The following high level equation and the detail description thereafter will provide supporting information to help reinforce your decision to automate your Accounts Payable.

Instead of giving a hard coded “ROI Calculator” we thought to give you a broader framework based on which you can do your ROI calculation more precisely for your specific working  environment.

How to Calculate the Current Cost of Your Manual AP Process

1.1

Manual Invoice Processing Cost

+

1.2

Manual Payment Processing Cost

+

1.3

Cost of Poor Quality (COPQ)

=

A

Total Manual Account Payable Cost

How to Calculate the Future Cost with an Automated AP Process

2.1

Manual Invoice Processing Cost

+

2.2

Software Subscription Costs

-

2.3

Early Payment Discount

2.4

Implementation Effort Cost

+

2.5

Training and Change Management Effort Costs

=

B

Future Automated AP Cost

Now, once we have calculated Total Manual Account Payable Cost(A) and Future Automated AP Cost(B) let’s go for the ROI calculation. Note that the below calculation will give you a conservative estimate of ROI and hence you will “err in the side of caution.”

ROI (%) = [(A-B)/(B)] *100

With respect to the above Block Schematic, you might have observed that we have indexed each of the Blocks as 1.1, 2.1 etc. The purpose of this is to let you know the important cost components of each of these blocks. So here we go.

1.1 Manual Invoice Processing Cost

Manual time spent by AP staff to receive and sort invoices, enter data, match to backup documentation like Purchase Orders(PO), route for approval, follow-up on delays in approval and vendor inquiries, hardcopy filing and retrieving. Time spent by approvers as the approvers double check manually before approving and this also consumes time.
I have observed some clients following semi automated processes like the approval request is through a system but the supporting hardcopies required for approval being moved manually from table to table. The semi automated process helps a bit but only just. I would also like to capture the handling and printing stationary cost as in case of high volumes this may be a significant amount.

1.2 Manual Payment Processing Cost

If the payment instrument is mainly through Cheque then it consumes time of AP staff in printing and handling the Cheque and the supporting documents required for the authorized signatory. Authorized signatory’s time is consumed for verifying the supporting documents before signing on the cheque. Further manually tracking of remittances and reconciliation also consumes time of AP staff.

1.3 Cost of Poor Quality(COPQ)

This is sort of an invisible enemy in your battleground. Often gets ignored and unaccounted for. Hence, I thought to consider it in our scheme of things.
Imagine data being entered wrongly in the system manually and it does not get detected at several stages. If it gets detected there would be rework hours to fix it. If it does not get detected then the problem gets amplified at a later stage. For example the issue of duplicate invoice payment is always real when done manually.
Imagine the AP staff manually handling a bunch of invoices in a single day. It will be difficult for the AP staff to prioritize the payments based on the payment discounts offered by the Suppliers. What does the AP staff do? The AP staff will move the invoice of the Supplier who follows up more for their payment. After all a squeaking wheel draws attention. One may argue why blame the AP staff, fair enough, you can blame the system which does not support the AP staff to do a quality job. At the end of the day it is a lost opportunity to reduce cost.
In a manual process dealing with hardcopy documents, storage and retrieval of documents consumes staff time. Specially a hardcopy stored in a folder and stacked in a cabinet maybe a year back are sometimes hard to find when you need them. Imagine the AP staff has to match the Invoice against a specific Purchase Order(PO). And the AP staff does not find the PO at the office just because somebody has wrongly stacked the file in the cabinet few months back. What does the AP staff do? Call the supplier and request to send a duplicate PO. I have seen this happen hence I can say it is real. Does this rework hours get captured? Normally it doesn’t.
Further, has your AP department missed to pay the suppliers on time? I am sure it has happened. Is the supplier satisfied or dissatisfied? It’s a no brainer. Have you measured the cost of poor quality here? Probably not, because it cannot be measured. But certainly there is a negative impact on supplier relationship.
Let me give another example. Audit. Just before audit, we start preparing for the audit, collect hardcopy or softcopy “evidences.” What happens after the audit? We get a few Non Conformities(NCs). Then we start working to remove the NCs before the next audit. Do we capture the hours we spend in preparing for the audit and thereafter addressing the NCs? No. Perhaps we blame our existing system for the moment and forget it soon. And this cycle has continued for quite sometime.
Likewise if you get into details of your current manual process you will find various other opportunities where you can identify quality issues and subsequently cost of poor quality- sometimes you can monitize it and sometimes you can’t.

2.1 Software Subscription Cost

It depends on the supplier you chose and the payment terms you negotiate. It may be as simple as an annual License fee for specified number of users or it can be a purely SaaS model of pricing where you pay per use.

2.2 Remaining Manual Processing Cost

Let’s be realistic. It cannot be 100% automated as there still may be some manual intervention be required.
The Optical Character Recognition(OCR) engine may not be able to read 100% of the characters. Hence some manual intervention may be required. You have to design the approval flow process which may need to be changed once in month for all practical purposes. You may need to configure the business rules maybe once in a month for all practical purposes.
You may need to handle exceptions and collaborate with others to resolve issues. For project contracts, milestone based payments may need to have some discussion like before when the process was manual and so on.

2.3 Early Payment Discount

After AP Automation, chances of missing the early payment is almost nil as you will be able to see it in a Dashboard. Hence you are able to avail the early payment discount offered by the suppliers.

2.4 Implementation Cost

Effort hours will be required from your Finance and IT department to work with the Vendor supplying the AP Automation Application. If Out-of-Box integration feature is there to integrate with your existing ERP then the effort is less otherwise it will be high.

2.5 Training and Change Management Effort

Post deployment of AP Automation Application the users have to be trained so that they can maximize the benefits for themselves and the organization.
Change Management is crucial as you are not only dealing with System and Processes but human beings. If not been done correctly the initiative of AP Automation may not yield the desired results. Hence change management needs management attention. Frequent and timely communication about “what’s in” for them and “what’s in” for the organization needs to be done.

Conclusion
Measuring your AP automation ROI helps you understand the financial impact your automated Accounts Payable solution has made on your company.
Whenever you change or update any AP automation process , you should continuously monitor, analyze, and make improvements to make sure you are getting a solid ROI. Start by pulling detailed analytics reports on your Accounts Payable KPIs so you can determine if your automated AP solution is working for you and your company.
If you want to know what are the critical KPIs you need to track to ensure you continue to get your ROI, visit our Blog “How Invoicing Automation helps in tracking the critical Process KPIs?

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

Things to look for when you Evaluate an Accounts Payable Automation Solution Provider for your Company

Approx. Read Time 11 minutes
Posted by Team PEOL on October 14, 2020

Things to look for when you Evaluate an Accounts Payable Automation Solution Provider for your Company

“I am bogged down by errors in data entry.”
“The invoice processing is so slow, even a snail seems to move faster.”
“ I am having nightmares tracking past invoices!”
“ I get too many calls from suppliers in a day .”

These are some common woes of accounting employees who are struggling with a manual system for accounts payable. Does it seem familiar? It’s time, you moved to an automated AP solution.
You know the criticality of the Account Payable function in your company as it deals with paying money to your suppliers and partners timely and accurately. One decimal point here and there or one “zero” more or less will result in overpayment or underpayment.
While moving to an automated AP solution is a good move, you may get overwhelmed by what are the factors to consider while choosing the AP solution that’s right and what suits your company the best. This article throws light on those factors.

What are the factors that you should consider while evaluating an AP automation solution ?

1

End-to-End Versus Point Solutions

2

Features and Functionality

3

Integration

4

Implementation Support

5

Invoice volume and Variety

6

Return on Investment

7

Reputation

8

Experience

1. End-to-End Versus Point Solutions

Some solutions offer point solutions, whereas some offer the entire end-to-end solution.
There are four important distinct tasks that moves Invoices from start to finish:

Step 1: Invoice Capture

Step 3: Payment Authorization

Step 2: Invoice Approval

Step 4: Payment Execution

Each of these steps from 1 through 4 are “Point Solutions” and all the 4 steps strung together seamlessly will be an “End-to-End Solution”. Of course Point Solutions solves part of your problem and End-to-End Solution will solve a lot of your problems!

2. Features and Functionality

Some of the questions you should ask around features and functionality are:

  1. Find out what are the Technologies the AP Automation Solution Provider has used. Optical Character Recognition(OCR)/ Intelligent Character Recognition(ICR), Intelligent Word Recognition(IWR)/ Robotic Process Automation(RPA). This is important to judge the degree of Automation achieved. Less Automation means more time consuming manual work for you! Depending on the technology used, solution providers will claim that their Invoice Capture Engine captures 90%,95%,99% etc. of the Invoice data correctly. 
  2. Does the Application have flexible and easily customizable Approval Workflow to design approval flows with predefined timelines within a short span of time?
  3. Does it allow you to Configure the Business Rules you want to set easily?
  4. Does it have an Unified Digital Cockpit which shows: Invoices to be processed and invoices under process, Supporting Documents required for Approval?
  5. Can you generate various Reports readily for Management Review and to analyze the current state of the process?
  6. How does it help your Audit requirements?
  7. Is it able to handle and detect suspected duplicate invoices?
  8. Does it collaborate with other databases and matches invoices against Purchase Orders(PO)?
  9. Does it allow you to handle Exceptions easily which arises after invoices are under process during the Workflow?
  10. Does it allow the user to approve invoices on mobile devices like iPhone, iPad, Blackberry and Android based mobiles?
  11. Can Stakeholders access invoices, collaborate to resolve problems, and re-route invoices for approval?
  12. Whether it is hosted on Cloud or Server? What are the Security features?
3. Integration with your Existing ERP or Accounting System

Before you get too deep into the process with an AP Automation solution you should verify that it is compatible with your existing accounting system or enterprise resource planning (ERP) system. Not all solutions work with all systems, so this should be one of the first questions you ask.
Check if the AP Automation Application has any Out-of- the Box Integration feature with your ERP or Accounting System. If Out-of-Box Integration is there then it means less time to integrate and less technical issues faced while integrating or even thereafter. In case Out-of-Box Integration Feature is not there then you may like to know how many months/weeks will it take to integrate? Further, you also need to check what are the payment platforms this solution integrates with.

4. Implementation Support

Changing from one system to another or upgrading a system while keeping your business process ON is like changing the tyre of a speeding car while it is running. This is seen to happen easily in James Bond movies but in reality it is very challenging.
You need to know how fast can they implement your automated AP solution? Will the solution be easy for your AP and management teams to absorb? If technical support is needed, can you get someone on the phone right away? The best way to answer these questions is by asking other customers. So request that your vendor provides references—preferably businesses that are similar to yours in terms of size and industry vertical.
Further, will the vendor offer initial and ongoing training to help your staff understand how to use the solution? Will the vendor offer an SLA for resolving support tickets and give you the option to access support any way you want—phone, email, webchat?

5. Invoice volume and variety- Can this AP Automation Solution Handle our Invoice Volume and different types of Invoices?

If we ignore this topic then we are assuming that any AP Automation Solution provider can handle any volume of Invoices per day/week/month. Well, normally it does but if your company is handling a high volume of invoices per day/week, it is better to discuss with your AP automation solution provider with an estimated number and check if it can handle this volume.
Invoices come in various forms to your company. Do a due diligence to ensure that all types of invoices which comes in can be handled by the AP Automation Solution.

6. Return on Investment(ROI)

Your ROI will be different for different AP Solution Providers. Hence it is important for you to calculate your ROI separately for each of your prospective AP Automation Solution providers. Why is it so? It is mainly due to the initial cost of the Solution and also the Features of the Solution. For Point Solutions the initial cost may be low but your ROI may also be low. To know more about “How to measure your ROI on your AP Automation” , go to our Blog

7. Reputation of the AP Automation Solution Provider

When you buy something on-line from an E-retailer website you read the product reviews and look at the ratings. You can do the same thing here as well. There are multiple open- source sites where you can read reviews from Verified Users of various AP Automation Solution providers.
If you want to know further information related to the company like financial information, leading investors, merger and acquisition, there are open-source sites for these as well.

8. Experience of the AP Automation Solution Provider

AP Automation Application handles one of your most important business processes – the money you spend! You definitely don’t want to entrust it with a fly-by-night software provider or a new entrant to the market.
CFOs and AP Heads are, by nature, careful and meticulous people. Any decision they take they consider the Risk factor and it’s Mitigation plan. And when it comes to AP automation software, the greatest hedge against risk is experience. So carefully consider the track record of the companies you consider entrusting with your AP automation.
So how do you do it? Read the Case Studies with specific customer names carefully pertaining to your industry. Ask for at least three references where they have implemented the AP Automation Solution. Talk to the references to find out their experience in implementing the AP Automation Application.

Next steps:
As you continue to evaluate an automated accounts payable process, make sure you are asking the right questions on your vetting calls with potential vendors.
If you are looking for the highest level of efficiency and the best return on your investment, the best route to take is an end-to-end solution. Taking a holistic approach and connecting all aspects of accounts payable into one streamlined workflow enables companies to benefit from the greatest amount of efficiency, the most flexibility, and highest level of security.
When CFOs and AP Heads evaluate to buy an AP Automation Solution provider for their company it is recommended that the IT Heads are also involved in this evaluation process from the very beginning.
Are you ready to take the plunge into automating your AP? Check out our videos…

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)

Why Should Accounts Payable Teams Automate Now?

Approx. Read Time 9 minutes
Posted by Team PEOL on October 14, 2020

Why Should Accounts Payable Teams Automate Now?

COVID-19 turned the world upside down. It has affected businesses worldwide and has forced companies to take a hard relook at their Strategy and Operations.
The acronym OOO (Out of office) may soon be defunct with WFH- Work From Home making it’s entry into the corporate acronym list through the back door! The line between office and home has blurred and WFH has changed the workplace we knew of until March 2020.
How long will WFH last? While no one really knows, some companies have started taking decisions to make WFH more permanent.

“There will be a long-term adjustment in how we think about our location strategy … the notion of putting 7,000 people in a building may be a thing of the past,”
~ Barclays CEO Jes Staley
Business process change – how it is moving from ’to do’ to ‘must do’ list

Sometimes early this year in 2020, working remotely for some business processes might have been in the “to do” list of projects under Disaster Recovery and Business Continuity Plan for functional heads like CFOs and CIOs. But looking at the current scenario these projects which were in “to do” list of projects have to be moved to “must do” projects in the later half of 2020. How do companies do it? Well, we don’t have a choice other than re-engineering our work processes to adapt to the forced change.
In short IaaS and SaaS adoption will be the key enablers to adapt to this change from a technology perspective.
We have seen that different companies are at different stages of their Digital Transformation journey. Some companies who were ahead in the curve were affected less and the companies who were behind in the curve were affected more.

Take the case of hardcopy documents. For companies behind the curve, even during the lockdowns some executives had to go to the office for a few hours just to collect the bunch of hardcopy documents so that they could work from home.
These companies who are dependent on hardcopies completely or partly might be wondering – ”Had we automated some of our business processes by getting rid of the hardcopies, we would have been in a better position.”
Well, it’s not too late, you can still automate some of your processes NOW! Let’s take for example Accounts Payable and why it should be automated?

Why the Accounts Payable(AP) Teams should automate NOW?

1

Reduce Operating Cost

2

Working Remotely

3

Maintain Supplier Relations

4

Early Payment Discounts

5

Secure Environment

1. Reduce Cost and Do More with Less

AP Teams have never been a Profit Centre but a Cost Centre. In the current economic scenario most of the companies would be under pressure to reduce Operating Costs.
Adoption of Digital Invoice Processing Application would help companies to reduce cost per invoice processed. Cost per invoice processed is much higher for hardcopy intensive and manual data entry processes.
Adoption of Digital Invoice Application certainly reduces the average cycle-time of the bunch of invoices processed. In other words the Productivity of the entire function involved in invoice processing is increased. This means the function will be able to process the same number of invoices with lesser resources or process a higher number of invoices with same resources.

2. Working Remotely is not an Option but a Requirement now

Executives are forced to work remotely or at best work from office and sometimes work remotely. This would be possible by adoption of Cloud based software applications like Digital Invoice Application. Companies are also viewing Work From Home(WFH) as an opportunity to reduce office infrastructure operating costs.
Further, executives who are travelling out of office can review and provide their approval from their mobile devices. This reduces the cycle-time of invoices processed as the approval time is reduced.

3. Supplier Relationship Management

In this current economic scenario of 2020, with most companies being under financial stress, suppliers are bound to be affected too. Paying them timely and accurately is the key to keep the supplier relationships at a healthy level. Adoption of Digital Invoice Processing Application certainly helps.

4. Avail Early Payment Discounts and avoid Late Payment Penalties

Companies are looking out to save costs by all possible means. By adoption of Digital Invoice Application(DIA), early payment discounts will not be missed and also late payment penalties can be avoided. How? Digital Invoice Application has an Unified Digital Cockpit where the executive can see the payment terms of each invoice based on which the executive can set the priority of invoice processing. The manual process of invoice processing tends to be on a First In First Out(FIFO) basis, or pay to the supplier who follows up more for payment on phone or by e-mail.

5. Secure Environment for Digital Invoice Application(DIA)

We have seen this year that the cyber security threats have increased significantly than before. This is because many companies were forced to carry out their financial transactions or information exchanges remotely without having adequately secured the environment just to keep their businesses rolling. Selection and investment in an Digital Invoice Application can mitigate this risk. This is because a Digital Invoice Application is normally hosted on the Cloud which has Artificial Intelligence based security features.

Since the start of Covid-19 pandemic, World Health Organization(WHO) has reported fivefold increase in cyber attacks, urges vigilance. This is mainly due to vulnerabilities of organizations caused due to an unexpected health crisis at large.

While the world struggles with the impact of COVID-19, cybercriminals see it as an opportunity. Since February 2020, IBM X-Force has observed a 4,300 percent increase in coronavirus-themed spam.

Time to act is NOW
Knowledge plus experience equals wisdom. We all had the knowledge that Digital Invoice Application can save time and money but we did not have the unforeseen experience which we had NOW which will push us to adopt AP Automation Applications. NOW is the time for CFOs an AP Heads to use this newly gained wisdom to take the next step of implementing AP automation.

Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing

What are the Product Features of PEOLs Digital Invoice Processing Application

Know more about Express Lane Invoice Processing Orbit (ELIPO)