Most businesses have a structured Account Payables (AP) process. This process is critical as it protects the business from releasing incorrect amounts of money and making unauthorized or contractually non-compliant payments. Unfortunately, many well-intended business processes run the risk of becoming bureaucratic and inefficient.  For example, the average AP workflow for a single payment comprises twelve distinct processes for a typical organization. These processes happen across a minimum of three distinct software platforms and involve stakeholders from at least three different organizations – the client, the service provider, and the bank. The distinct AP processes include:

1. Receiving the invoice
2. Verifying the invoice
3. Matching the invoice with the issued Purchase Order
4. Approval Workflows
5. Recording transactions in the AP Ledger
6. Reviewing payment terms
7. Authorization of payment
8. Processing Payment
9. Documentation and Filing
10. Reconciliation
11. Vendor Communication
12. Reporting

For these processes, the AP officer in a highly digitized organization will need to work across an email exchange service like MS Outlook , a data repository like MS SharePoint and an ERP – like Dynamics 365 Finance or SAP. For companies at the earlier stages of digital transformation, there will be more platforms and software to work across.

At a working level, the AP officer will need to do the following for every AP transaction:

• Receive the invoice via email. In some cases, physical copies of invoices are still submitted. They will have to take these and scan them for the process to begin.
• Verify the invoice. This usually requires the AP officer to receive some form of confirmation from the activity owner to verify that the goods and services were satisfactorily provided.
• The officer must then compare the received invoice with the Purchase Order issued for the goods or service. They will typically need to check the service lines invoiced for, the rates applied, the quantities billed for, the location of service delivery, duration, dates, signatories, and a few other details depending on the situation.
• Trigger the approval workflow. This means that the required authorities who are expected to approve the payment will be notified, via a system prompt, or manually via a mail or phone call, to authorize.
• Once all the approvals a received, the details of the transaction are transferred to the payment ledger for further processing. The payment terms are then considered to enable payment scheduling. Most businesses incorporate a payment timeline to manage cash flow demands. The correct payment terms must be selected and communicated with the payment entry.

The organization’s payment authorization processes then kick in. This is usually a separate or at least a different aspect of the authorization workflow that happened previously. The required documents and evidence for these payments are captured and filed. The required authorizations are sent to the banks for funds to be released to the vendor’s accounts. Where discrepancies occur, some reconciliation needs to happen. Sometimes these errors emanate from the operational side of the business, the vendor, or from finance operations. For example, charging for a service to the wrong account, or not applying the correct set of taxes, duties or levies to the payment. After the payment is processed, further bank reconciliation processes still need to happen.

This process will happen thousands of times a year in the life of an average-sized business. It will generate even more documentation, and it very rapidly becomes a very tortuous process for organizations. For this business process, digitization is not enough. The minimum required for your business is automation.

For such highly involved transactional activities, the automation process involves building bots. Bots are simply software programs that autonomously execute a specific set of tasks. Using bots, the majority of the steps that your AP officer traditionally executes can be replaced by a robust and reliable program. Your AP officer is freed up to manage the system, unblock bottlenecks and perform tests to ensure the process is running as it should. This automation process, while not new, is gaining a lot of traction and is a very potent game changer for businesses staying at the cutting edge of digital transformation.

At Intelbyte, we utilize Microsoft’s Power Automate  to deliver Robotic Process Automation (RPA) solutions for our customers. These solutions are extremely potent as they efficiently integrate with other Microsoft products in the organization’s ecosystem. Our RPAs enable these twelve AP steps to be condensed into three distinct steps. This optimization has a compounding effect as it first shortens the individual subprocesses that make up the automated step, before aggregating the processes. The speed and accuracy it unlocks are immense.

Intelbyte strongly advocates for businesses to digitize and optimize. You bank immediate short-term gains in terms of cost reduction, faster operations, and fewer errors from automating your AP process. You also set up your organization to be properly positioned to leverage emerging technologies which unlock competitive advantages for your business.

If you are still manually processing invoices or having a human agent work through the listed traditional AP steps, your business is leaving much value on the table. Contact us today, and we will be happy to create a leading investment case, for transforming your business operations and AP process.