A new year is on the way and it’s the perfect time to review your company’s processes to see how they can be made more efficient next year. One of the best places to start is by reviewing your accounts payable processes.
Step 1: Document & Review Your Existing Process
Knowing how invoices arrive and move through your organization before, during, and after processing is the essential to see where improvements are needed the most. For accounts payable, some of the things you need to know are:
- How invoices arrive and what format they’re in (such as regular mail, email or fax)
- Who’s involved in the invoice approval process
- The number of invoices processed monthly
- The approval process for both PO and non-PO invoices
- The information management needs access to
- How exceptions and problems are handled
- How invoices get posted
Step 2: Set SMART Goals
After you’ve documented and reviewed your accounts payable processes, it’s time to set some SMART (specific, measurable, achievable, relevant, time-bound) goals to help you define clear, achievable objectives. Let’s look at an example of what accounts payable SMART goals could look like:
- Specific: define a precise objective, such as “improve invoice processing time.”
- Measurable: make the goal quantifiable so you can measure progress, such as “reduce invoice processing time by 20%.”
- Achievable: it’s important that the goal you set can be achieved. Looking at your process (like you did in step 1) and identifying where improvements can be made can help you determine if your goal can realistically be achieved.
- Relevant: Your goal should be in line with your organization’s goals. For example, if your company is looking to cut costs, improving invoice processing time can help achieve that.
- Time-bound: Your goal needs a set date of when results can be achieved by, such as “reduce invoice processing time by 20% within 9 months.”
Other possible goals for your accounts payable department might be reducing data entry errors, taking advantage of early-pay discounts and avoiding late fees.
Achieving AP Efficiency with Workflow Automation Software
After you’ve set your SMART goal or goals, it’s time to make them a reality. Since many goals for accounts payable are likely to be time-saving and cost-cutting goals, workflow automation software would be the an excellent solution to achieving them. Workflow automation software can:
- Route scanned invoices to appropriate staff based on your business rules
- Send email alerts when action has (or hasn’t) been taken
- Determine if all information is present for processing and notify appropriate staff if something’s missing
- Track processing steps and employee productivity to help you easily identify bottlenecks
- Provide management visibility into the processes
- Electronically share data with your ERP or accounting system
Ready, Set, Automate
Reviewing your existing processes and setting your goals is a great first step towards achieving efficiency in your accounts payable department. If you want to learn more about how workflow automation software can help you reach your goals, call us at (888) 294-1965 or contact us below.Contact us for a Free AP Demo