The slow-climbing – then rapid – shift to a remote business world has furthered the argument for replacing manual A/P processes with electronic ones.
It’s no longer realistic for your A/P team to have critical invoices, tax forms and other documents sent in the mail and passed around the office. They must be able to access items remotely – via an email inbox, online portal or other software system.
But CFOs know now may not be the ideal time to jump into a whole software system overhaul. During this hectic period, A/P needs to focus its time and energy on core tasks, not feel pressured to quickly implement automation, explains finance expert Ilija Ugrinic.
You can, though, use the remote workforce shift as an opportunity to really dive deep and analyze your existing manual processes and identify how they can be improved in the long term.
3 valuable questions
To assess your payment process and plan to go more paperless, your team can start with these questions:
- Are the documents we receive and send truly “electronic”? Some regard any invoice or P.O. sent through an electronic channel as an electronic document. But you know an image-based PDF invoice that’s scanned and emailed isn’t the same as a truly electronic invoice in XML format, where data can be more easily extracted.
- For receiving e-invoices, should we focus on our end (A/P) versus their end (vendors)? For many A/P departments, the goal is to make all invoices electronic from the source. But it may not be realistic to expect that of vendors that don’t have the time or capability for e-invoicing, especially right now. Perhaps a better objective is to get all invoices, regardless of source, into one organized, accurate digital location that A/P’s system can process, Ugrinic says.
- For e-payments, what’s the best tactic for vendor conversion? Similarly, not every vendor will be equipped to receive e-payments. So, your team should analyze your vendor base and identify the best candidates to target for conversion (e.g., vendors that are digitally advanced and want to be paid faster), recommends A/P expert Rob Israch. Then provide them with a range of e-payment options (e.g., ACH, wire, credit card) and find one that matches their needs and capabilities.
Need more information?
Premier Learning Solutions is offering a workshop, A/P Internal Control Best Practices: Going Paperless.
Live: Tuesday, July 14, 2020 at 1PM (ET) Also available on-demand
Some of the topics it covers include:
- how paperless processes increase transparency, improve cash flow and reduce room for error
- the foundation of internal controls and the principles that touch each part of the organization
- ways to optimize your A/P department that fit your company’s specific needs, and
- which processes could be negatively impacting your profitability and productivity.
The speaker is Carl Young, who holds an MBA and completed graduate studies in Accounting and Taxation, was formerly the CFO of a $275M, high-growth, technology-based company and has over 25 years of senior level business management experience and training experience in finance, accounting and business management.
Click here for registration and more information.