Invoice Automation Project Resourcing is critical to a Successful Implementation
The key to making sure the implementation of an Invoice Automation solution is successful is project resourcing, which is the same as most other project implementations, however, there are some prime factors that will determine the project's success.
Project Resourcing - Identify the Resources required
Implementing Invoice Automation requires specific resources within the project to ensure correct delivery and compliant timelines. One of these is that the Project Sponsor must provide full support for the methodology and the approach.
As part of this, it is necessary to identify the key resources that will then make the project a success:
- AP Manager or Team Leader –
This resource will understand what the Accounts Payable team experiences on a daily basis, they will know the volumes of invoices they process daily, the types of invoices coming in (PO or Non-PO) and importantly the key volume suppliers through to the ones that invoice a few times a month or year - AP User – This resource will be key to the success of the implementation. They will be using the system every day and need to adopt the solution and embrace how to process invoices in the way it is designed to work. They will also be a key testing resource during the project that will be able to validate the core AP business processes and how they can be dovetailed with the solution.
- ERP Technical – Understanding the ERP setup is critical to ensure invoices can be submitted into your ERP and to understand the configuration of the environment. There are several key factors that need to be understood such as Tax, PO Matching criteria and Coding Config that will ensure your standard business process does not conflict with the setup required for processing invoices.
- Procurement Manager or Team Leader – The success of Invoice Automation is dependent on many things, however, when the project goes live, its success can be determined by how tightly engaged the Accounts Payable Team and the Procurement Team are. If the invoice solution enables auto-matching of PO data, the solution will rely on the procurement teams to enable the best possible match based on the information set up on the PO and then provided to the supplier.
Understand your Current Process
We have all heard the statement, “this is how it has always been done”, however, that doesn’t mean the process is right. If process improvements are going to be made, understanding the existing process and its flaws will enable the business to target where change needs to be adopted. Have you considered:
- How are invoices received? And their quality?
- What’s the proportion of PO to Non-PO?
- Where are invoices received? Centrally?
- How Many PO’s are created after receipt of invoice?
- Is 3-way matching required and is the GRN process efficient?
- What information is on the PO?
- Why are Late Payments occurring?
- Is the Supplier putting what we expect on their invoice?
- What Processes are Manual and Why?
- What are you trying to Automate and Why?
- How good is my Supplier communications?
- Master data must be cleansed, e.g. How good is my Supplier data?
- Migration of legacy application?
- User authentication Single Sign-On (SSO)?
From experience and discussions with Organisations, the initial approach is always to focus on the first two points, because the belief is that “if I receive a PDF and it’s a PO", then surely it will process with a high degree of success?
This is not always the case and many factors determine the success. Failure to consider the points above will lead to the solution not meeting expectations. The organisation must buy into the process and without considering the above, your implementation will not go smoothly.
The Invoice Automation Myths
The perceived key business requirement is 100% straight-through processing as processing invoices sounds straightforward. The invoice is received, information processed and then approved, before submitting for payment. However, this is an unachievable myth with the biggest mistake, being the belief that the process starts when the invoice is received, rather than when your requisition is made. Assuming that a system could read a document with 100% accuracy, the following are elements that need to be considered:
- Is there a PO?
- Does the invoice always match the PO?
- Is the Unit Price on a line item always correct?
- Is there never an Overbill of quantity?
To understand the importance of this data see our blog
- Does the buyer always remember to include Freight charges?
- How are you handling Tax or CIS?
- Are utility invoices always PO based?
All these factors are outside the control of an automated system. They are driven by business processes and business change. The question that needs to be asked is “how can we get to 80-90% straight throughput?” Not all businesses can achieve this. However, what if 90% of your invoices can be processed with minimal touch and corrections?
Be prepared to Change your Process
Taking into account the Myths of Invoice Automation, the key to success is communication between the Project Team, Accounts Payable, Procurement and Business Users. Commonly the following is true before we arrive but are misconceptions that need to be addressed by change:
- Organisations attempting to implement No PO No Pay policy, when AP and Procurement have different ideas
- Project teams initially think that business change can be implemented when a solution has gone live
- Organisations think invoice automation is about straight-through processing and the solution is 100% of the requirement
- Organisations believe they cannot ask the supplier to make changes or if they do, this communication can be inaccurate
- An emailed PDF is always better than an invoice through the post
Conclusion
Mi Invoices has been developed to embrace the capabilities required for the automated capture of invoices by leveraging rules, your data, and can speed up processing invoices, which leads to a reduction in the cost of processing. However, the success of the automation depends largely on careful planning and preparation and ensuring the project resourcing can address all the key elements within the process and the business that facilitates a quick return on investment. To find out more and understand how Arcivate implements Invoice Automation and how Mi Invoices enhances the process please contact us.
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Pre-Approving a Non-PO Invoice?
