Touchless Payables Help Achieve a Paperless Accounts Payable Process

January 20, 2017 Chris Doxey

Companies can achieve a paperless accounts payable process by adopting touchless payables. This can be accomplished with nothing more than procure-to-pay automation—from self-service supplier onboarding portals all the way to electronic invoicing (e-invoicing) with integration into accounting systems.

What’s more, on the path to a paperless accounts payable department, organizations will achieve better security, reduced fraud, and a shorter overall payments workflow.

industry expert explains how to go paperless with AP automation

Here are the individual components, that as a whole, comprise the complete touchless accounts payable workflow:

Automated PO requisition process

Once a purchase order (PO) is approved, it’s sent to the supplier for fulfillment. Digitizing—and automating—this process enables invoice and package slip matching to occur more effectively. This makes validating pricing and quantity received much easier. In turn, this simplifies PO closure and makes keeping track of partial payments much simpler.

E-invoicing

It’s only natural that after submitting an electronic PO, an electronic invoice (or e-invoice) would follow. Often times, a digitized invoice will simply arrive in an email as an attachment.

However, if a paper invoice is sent in response to an electronic PO, all is not lost. Simply scanning and digitizing the invoice—performing OCR to the document—would right this breach of continuity.

Automated approval process

Only once POs and invoices are digitized can automation truly work its magic.

Automated approval is the process of routing invoices to the appropriate party (or parties)—automatically. Gone is the need to walk around from cubicle to cubicle or building to building to get an ‘OK’ for each and every invoice.

Automating the approval process makes this automatic. What’s more, approvers will get incessant reminders if they fail to approve invoices promptly.

Best practice: Link automated approval list with HR’s employee records. As employees are promoted or transferred to other departments, their approval abilities will update accordingly.

Automated ACH remittance

At the tail end of the electronic payment is payment remittance—notification that an invoice has been paid. Sending a paper remittance for an electronic payment would be counter to any touchless workflow. Unfortunately, this is often an overlooked aspect to embracing the paperless back office.

Dynamic payables discounting

Once an organization reaches back office nirvana—a completely touchless AP process—they may be surprised to discover a new opportunity: dynamic discounting.

Dynamic discounting enables suppliers to be paid faster by agreeing to lower payment amounts. Said another way, instead of waiting 90 days for full invoice payment, suppliers may accept a 1 percent discount for payment within 14 days.

And the only way organizations can realize these discounts is by completing the accounts payable workflow faster. A once lofty goal becomes attainable when a touchless accounts payable workflow is implemented.

Ultimately, any accountant looking to implement a more secure and faster payments workflow in accounts payable will quickly realize the advantages of these touchless and paperless practices. And simply piecing all of these together—automated PO requisition, electronic invoicing, automated approvals, and automated ACH remittance—can help any department unlock the dynamic discount.

About the Author

Chris Doxey

Chris Doxey, CAPP, CCSA, CICA is an independent management consultant providing Internal Controls and Business Process Best Practice Solutions. She has extensive experience in procurement, accounts payable, internal auditing, internal controls, Sarbanes-Oxley compliance, payroll, logistics, financial systems strategy, and financial integration at Digital, Compaq, Hewlett Packard, MCI, APEX Analytix, and Business Strategy, Inc. She was recruited to assist MCI (formally WorldCom) recover from their internal control challenges. She has a bachelor's degree in English, a bachelor's in accounting, a master's in business administration, and a graduate certificate in project management. Chris has written numerous articles and published two handbooks: AP Leadership Skills and Implementing a Controls Self Assessment Program for Your Accounts Payable Department.

Follow on Linkedin Visit Website More Content by Chris Doxey
Previous Article
Weekly Ledger 30: Top Stories in Accounting and Finance
Weekly Ledger 30: Top Stories in Accounting and Finance

Weekly Ledger 30: Top Stories in Accounting and Finance

Next Article
Weekly Ledger 29: Top Stories in Accounting and Finance
Weekly Ledger 29: Top Stories in Accounting and Finance

Weekly Ledger 29: Top Stories in Accounting and Finance