The Evolution of AP: AP Automation Levels for Invoice Processing
Invoice Processing Options: AP Automation Advancement
In any accounting department, there are a number of ways to automate invoice processing and provide efficiency and improve productivity of staff members. The choice is really based on management’s desire to improve the overall invoice process, and is based on: volume of invoices, number of staff, and complexity of invoices. Below are the options available, and the benefits/drawbacks:
- Stick with paper (No automation) – many accounting departments opt for this option, and in certain circumstances, it can be a wise choice. Typically, if the organization has a very low number of invoices being processed per week, and minimal staff are required to process them, this can be a wise choice. The disadvantages can be the lack of digital archives for audit and legal purposes, and over time a requirement for space and file cabinets. Access can also be an issue, especially if remote personnel need invoice lookups.
- Scan Invoices Upon Receipt (Low Level Automation) – In this scenario, as invoices are received, they are scanned with basic scanning software, routed to AP staff, and indexed with basic invoice header information. Usually this will also entail a dual monitor setup, where staff will have the scanned invoice on one monitor, and the accounting software up on another. This removes paper from the process, provides some efficiency/productivity gains, and speeds up data entry and approvals. Usually email is used for basic approvals. Invoices are also archived automatically to provide access through a document management system.
- Advanced Capture & Extraction (Medium Level Automation) – In this type of processing, advanced document capture software is leveraged to auto-extract the invoice header and line item information during the AP process. The accounting staff sees the invoices and extracted data in a quality assurance step, and once the info is validated, it is then automatically routed to the ERP/Accounting System, as well as archived to the document repository. This provides a high level of automation, and minimizes processing time.
- Advanced Capture + Workflow (Highest Level Automation) – This type of solution includes not only document capture automation of all invoice processes, but also adds workflow software to aid in the routing of documents, kickback of invoices to vendors and solving any issues. The addition of digital workflow adds the ability to track and report extensively on the AP process.
So, why not just go with the top level? Depending on your staff, the move to digital can be a big step, and can also be expensive. So for any project success, you need full management and staff support. Purchasing software that support all enhanced levels of invoice processing can be key. Questions? Contact us today for a demo.