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Ohio ASUG Chapter Meeting |
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Accounts Payable and Vendor Portal Best Practices
Tom Walker, Senior Process Architect from Optura, presented at the Ohio ASUG Chapter Meeting on October 3, 2003 and focused his remarks on a few key Accounts Payable issues facing businesses today:
- The cost per invoice ratio is currently too high in most companies
- Late payments, lost invoices and duplicate payments often become the norm not the exception
- There is a lack of process visibility and monitoring with current systems
- Inefficient internal productivity eliminates the possibility of reducing AP staffing levels
- Poor communication between process participants (Purchasing, Receiving, etc.)
- Cycle time is too long for exception resolution issues
- Compliancy with Sarbanes-Oxley Act Section 404 related to internal control
Workflow solutions from Optura can be the key to bringing all these challenges under control. The central theme of workflow is turning isolated, separate activities into silos of knowledge that can be accessed by each participant in a process. For example, instead of vendors sending invoices to many different process holders, such as Project Managers, Buyers or Requisitioners, they would be able to send invoices to A/P directly. With workflow in place, A/P is then able to make this information available to each receiver, approver and buyer in the process so they can perform their function accurately and efficiently. Providing process control and visibility to the AP invoice exception processing helps management be assured that the company liabilities are properly stated in a timely and accurate manner as prescribed by the Sarbanes Oxley Act.
Walker also covered three Best Practices that dramatically improve A/P processes:
- Centralizing invoice receipts. This provides immediate visibility to liabilities, reduces duplicate payments and improves vendor service.
- Removing A/P from manual problem invoice resolution and follow-up. Benefits for this practice include eliminating late payment charges, negotiating better terms with vendors and improving internal efficiency.
- Analyzing process data for continuous efficiency gains. Key benefits from this best practice are identifying exception reasons and problem vendors, quickly identifying & correcting process bottlenecks for continual improvement, and sharing metrics with internal stakeholders.
The presentation concluded with a discussion on Vendor Portal and the current state of most business relationships with vendors and A/P:
- Vendors are consistently seeking information on payments. Calling into a company for a status report is not only time consuming and manually driven, but archaically inefficient.
- Documenting and accessing vendor activity in a system has been, historically, very difficult. Follow up on this activity is lacking because of visibility and poor tracking methods.
- Many Vendors don't have access to EDI. Providing a solution where vendors can enter invoices and associate them with an existing PO greatly enhances the process for both the vendor and the customer.
- Finally, duplicate invoices/payments are a thorn in the side of many companies and take too long for resolution.
Optura provides Business Process Optimization, SAP Workflow Automation and Vendor Portal Technology to dramatically improve the interaction with Vendors and the subsequent processing of invoices with problems. Vendor Portal and RapidFlow for A/P Invoice Exception from Optura;
- Reduces the amount of time an employee spends answering vendor questions
- Empowers employees to focus on value-added responsibilities
- Decreases the cost of processing problem invoices
- Provides ability to increase the number of vendor relationships without increasing the headcount
- Provides the ability to monitor Vendor usage and perform continuous improvement
For more information on Tom's presentation click here
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