Supplier Invoice Automation 

Manual invoice processing is extremely time-consuming and error-prone. Sudden increases in volume often result in expensive invoice matching errors and compliance issues, Manual invoicing often requires at least 15 steps before the final posting is done and the invoice can be paid. Many companies process around 1000 or more invoices per day, taking up to at least 15 minutes of manual processing time per invoice. AP automation can save companies valuable time otherwise lost on repetitive and redundant invoicing processes. In fact, organizations using AP automation can process over 4 times as many invoices as those without automation, reducing the invoice processing time from 20 days down to only three days on average.  

Common Accounts Payable issues  

“It just pays my suppliers it is very simple”.

“Why should I look at AP – it works”

“If it is not broken why fix it”

Those are some of the comments we hear when we start conversations with clients about reviewing or enhancing their Accounts Payable process regarding process issues.

Standard Accounts Payable has not really changed since the implementation of MIRO and Logistics Invoice Verification. However there are a number of common mistake clients make that impact their business. Some clients are not really aware of the issue, as they throw resource at any issue and do not know how to deal with basic issues.

Before we review the types of issues it is best to quantify what the business impacts could be by having a poor accounts payable process.

  • Loss of early settlement cash discounts from suppliers
  • Suppliers being paid twice
  • Over inflated team of Accounts Payable clerks
  • Poor reporting for Vendor spend
  • Loss of vendor volume rebates

The list of business impact should be taken very seriously. Some of the issues that cause the business impacts are very easy to resolve and the potential benefits of resolving them very high.

Accounts Payable Issues

Vendor Master data: It is important to have a clear and concise master data process. Ideally the volume of vendors should be kept to a minimum. If you can purchase the same item from a number of suppliers it is best to agree the best vendor and ensure your whole organisation where applicable uses that supplier. This will enable your procurement team to negotiate better terms of payment, or even volume rebates as well as early cash discount. In turn having a small number of suppliers will reduce the volume of invoices you need to process as you will be buying in bulk and the suppliers could have many orders on a single invoice.

Purchase Order requestors: If any user in your organisation can request to purchase something the consistency of creating purchase orders will be affected. Some users might only be raising one or two purchase orders a year, and there is an overhead on training and data entry. The other key area of entering purchase orders is the coding of the order. If a user is not used to creating a purchase order there is a higher chance that the wrong GL account, cost center or even material is selected. This in turn will affect the approval of the purchase order as the wrong approver could be selected. This will impact the time to gain approval of the invoice or the purchase order, which in turn could see early settlement discount not being applied due to this delay. By selecting the wrong GL account and material, this will impact the reporting providing decision makers incorrect information to negotiate with suppliers.

Sigitek has developed a Solution, SIGI:AutoSIM. The Solution is purely designed on SAP ABAP which will be embedded to SAP without tweaking ant code.

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Supplier Invoice Automation
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