The Dangers of Getting AP Automation Wrong
June 9, 2015
Somehow, we went from being 15 minutes early to being 25 minutes late in the blink of an eye. Why? What happened here that caused such a drastic shift from a plane full of happy satisfied customers to a plane full of angry vexed clients?
Simple. Somewhere, someone lost sight of the OUTPUT.
When it comes to procurement transformation, AP Automation is an attractive starting point, and should be the starting point. The output, the check going out the door, is the realization of all the other procurement function’s hard work. Without the output, all the work upstream is for naught, much like a well-painted line missing the correct markings. It’s all well and good, but does it work?
Start with the Output.
AP and Invoice Automation are an attractive place to start your transformation. After all, this is where the rubber meets the road. The dollars being spent here are hitting the bottom line: the bottom line that has the attention of all those in the C-Suite. This translates into plenty of traction when you are selling your business case for transformation. Additionally, the benefits of AP Automation are numerous and well documented: faster cycle times, movement toward exception processing, more flexible staffing options. The list goes on. Starting here lays a solid foundation for building your procurement practice into a best-in-class contender.
But, you’re saying, are Invoicing and AP where to really start?
What if I optimize my sourcing and contracts to get the best price available first? Then, I can build a great catalog management system that updates to reflect those prices. Then wouldn’t the purchase order go out with those prices, which can be matched to the incoming invoices? All AP has to do is cut the check!
That’s how you paint the wrong line at the gate.
Those sourced prices and contract terms the team worked so hard for?
Due to delays in manually entering the accounting information in the invoice, finding the correct supplier (you know, the one that doesn’t match on the PO, Invoice, and AP records), and then cutting and mailing a paper check, your payment is now late, and your supplier is angrily wondering where their check is.
All the painters’ hard work, while great work, didn’t deliver the expected outcome. The plane was still delayed.
A missed requirement upstream can cause delays and require rework.
The same can be said when implementing a fantastic buying solution. Say you are going into User Testing on an implementation. Requisitions and orders are flying out the door seamlessly. Receipts are being created, and exceptions are being handled. Test scripts are all passing with flying colors.
Until you engage AP to test the Ok-to-Pay file. Testing grinds to a halt. AP wasn’t engaged effectively in the project, and a key required field is missing. This leads to project delays, rework to meet the new requirement, or a workaround put in place while a new project spins up to correct the problem. Which all means more cost.
The gate no longer fits the plane because of a missed requirement.
What’s the easiest way to avoid all of those risks?
Focus and start with the required output. Start your procurement transformation with optimizing and automating your AP and invoicing process.
Make sure the plane can still use the gate before you paint the line.
If you would like to know more about how Shelby has helped organizations achieve maximized business value with their strategic procurement transformation objectives, please contact email@example.com.