What Hyland has learned as a leader in AP technology

Technology plays an essential role in the accounts payable (AP) industry.

Yet despite investing hundreds of thousands of dollars in enterprise resource planning (ERP) applications or process automation tools, AP departments still face a number of challenges that affect the efficiency and accuracy of invoice processing. Physical paper documents, manual data entry, invoice exceptions, data errors and discrepancies continue to delay the procure-to-pay cycle.

As a leader in AP automation, Hyland has worked with thousands of customers around the world. Here are some of the things we’ve learned about the challenges AP departments are facing and the attributes that are most valued in AP operations.

AP departments face some digital transformation challenges

AP organizations need to embrace automation

The concept of process automation is not new, and automation technology has become the norm among AP organizations. Many of the challenges that delay AP processes, such as manual data entry and associated errors, can be eliminated with automation.

Additionally, fully or mostly automated AP organizations have lower days payable outstanding (DPO) and feel more confident about processing higher volumes of invoices.

Invoice processing delays have real consequences

Inefficient invoice processing is more than just an annoyance for AP and finance departments. Manual, paper-based processing, errors and exceptions can all lead to payment delays with very real and negative impacts on the business.

Process delays, in addition to adding stress to an organization’s AP team, can slow the delivery of goods and services. That, in turn, can damage relationships with vendors and suppliers.

When invoices aren’t paid in the expected period, it can affect the dollars accrued for the next period and make cash flow needs less predictable.

Visibility matters

AP professionals highly value the ability to view basic information about each invoice (PO number, vendor name, amount, etc.). But visibility into aggregate information about all invoices in process, as well as corresponding documents, is just as important.

A few of the details AP pros value are:

  • Corresponding documents for each invoice (e.g., packing slips)
  • Total volume/dollar amount of open invoices by vendor/supplier
  • Total volume/dollar amount of open invoices by month
  • Total volume/dollar amount of open invoices by process stage/status

AP workers also want more insight into process performance metrics, such as time to payment, time to invoice approval and workload per AP employee. These metrics help AP managers better evaluate their processes and target any bottlenecks to further improve AP operations.

Without data and process visibility, AP departments are at risk of increased confusion, mistakes and further delays that have real costs to the organization.

Choosing the right automation solution is crucial

When evaluating solutions, AP organizations should prioritize technology that provides the visibility their teams value so much.

Many AP organizations have been leaning toward content services solutions to automate their operations, which is a smart move. Content services platforms feature a flexible set of capabilities, such as intelligent data capture, workflow automation and ERP integration, that are configurable to specific organizational needs.

Most importantly, the robust reporting components of content services offer clear visibility into aggregate data about invoices in process. These metrics help AP staff better predict upcoming cash flow needs and proactively address delays.

The struggle is real

To an outsider, AP processing sounds simple: Approve the invoice, code it, cut the check and you’re done! What’s the big deal? But the people managing invoice processing day to day know how quickly things can get out of control.

AP professionals are outnumbered. The number of employees who don’t work in the department but participate in AP processes (like submitting purchase order requests or reviewing and approving invoices) can be significant. And the larger the organization, the more non-AP staffers the real AP staffers have to contend with.

Here’s why that matters:

AP staff spend considerable time responding to inquiries and resolving issues

Invoice approvers, vendors and other stakeholders all have questions. A lot of questions.

“What is the status of my invoice?” “Why haven’t I been paid yet?” “Do you remember when I submitted that one PO request that one time?”

These frequent interruptions not only distract staff from what they’re working on but can lead to significant delays, especially if invoice processing is manually driven and paper-intensive. That can make finding information and responding to inquiries even more difficult.

Rules and policies don’t guarantee control

Manual or automated, all AP departments have established rules and policies. For example, invoices can’t be approved without a matching PO number; all invoices above a certain dollar figure require additional review; and vendors must be approved before a PO is created.

While these rules may have been in place for years, it’s unlikely that all employees are familiar with them — especially workers who only sporadically interact with invoices. It’s also unlikely that people will follow all the rules even when they do know them.

Just as answering questions and responding to inquiries can delay processing, so can spending time reinforcing policies and correcting errors that result from process violations.

Compounding the problem is how organizations manage and monitor non-AP staff. Many organizations use inefficient channels, such as separate spreadsheets, to manage the participation of non-AP employees, communicate with non-AP staff and keep the process moving.

Lack of control creates delays

Lacking control across invoice processing can create delays that seem small but add up over time. Also significant: Organizations that lack control are missing opportunities to have their AP teams concentrate on more strategic work that creates value for the enterprise.

Less time responding to questions or correcting errors means more time building vendor relationships that could lead to favorable payment terms in the long run. Less time chasing down approvers means more time analyzing spending and payment trends to identify ways to improve cash flow.

The right content services platform can help AP organizations take control of their AP operations. With flexible workflows, organizations can build standard business rules into the tools that all employees interact with.

Instead of hounding approvers via email or instant messages, auto notifications let non-AP employees know when they need to take action. Best of all, the activity associated with each invoice is tracked, so there are never questions about status or modifications.

Hyland’s AP solution automates processes, manages invoices and associated content, and integrates with an organization’s ERP and other business applications to provide an end-to-end system. Discover how we help organizations improve visibility, gain control and increase efficiency across each stage of the AP process.

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Danielle Simer is a marketing portfolio manager at Hyland. Her mission is to share best practices and evangelize the power of enterprise content management (ECM) as a tool to automate paper-based processes and improve operations across accounting and finance, human resources, and contract management. Danielle joined Hyland after more than six years with a research and advisory firm devoted to helping senior executives manage their departments and teams more effectively. She received her bachelor’s degree from The Ohio State University and her MBA from Georgetown University’s McDonough School of Business.
Danielle Simer

Danielle Simer

Danielle Simer is a marketing portfolio manager at Hyland. Her mission is to share best practices and evangelize the power of enterprise content management (ECM) as a tool to automate... read more about: Danielle Simer