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At a recent IAPP chapter meeting, I listened to a colleague describe the challenges of accounts payable.  As manager of the finance department, she finds that all the great advances in communication are only making things harder.  They still get 50% of their vendor invoices on paper but also have to deal with email invoices, PDF downloads as well as Word, image, Excel and plain data files.  Chasing approval using pieces of paper is hard enough, she said, but multiple formats make the problem more challenging than ever.  

She asked me if there is a better way.  I started talking about automating AP.  But she immediately shook her head.  The last big systems implementation they did was a nightmare – one she didn’t want to repeat if she could help it.

So I offered my colleague, not answers, but some food for thought.  

It’s about the process, not the gadgets.  The first step in making things better is to turn your formal and informal processes into business rules.  They are the brains of the machine.  It takes a lot of effort and a deep understanding of how AP actually works.  But if you are going to use technology to fix a problem, it can only be as good as the rules that tell the system what to do.

Quality is paramount.  In an AP automation project, you should convert every incoming document – paper, email, Excel, doc, Web download, whatever – into a common digital image format.  Using a standardized document makes it much easier to communicate with the rest of the organization. For that conversion, the readability and completeness are vital.  But another kind of quality is even more important.  The data extracted from that invoice must be right, because it will drive the workflow, approval and payment process.  Garbage in, garbage out. The dirty little secret is that no single technology or data source can do the job.  You need to draw from the vendor master file, the purchase-order database, OCR and key-entry, and find a way to maintain quality despite all that complexity.    

Exceptions will make or break you.  Most incoming vendor invoices are pretty good.  It is the 20% with incomplete information and errors that create most of the work.  So your quality control process has to catch errors, not just in the process but in the source – the original invoice or the purchase order. Flagging only true exceptions that require your attention – and not every invoice with a slight issue – is critical.  Invoice processing SME’s (Subject Matter Experts) who know how to handle true exceptions are another key to success.

When we finished talking, she was still shaking her head – but now she was worried about how to persuade her organization to take a fresh look at automating AP.     

Greg Bartels is CEO of IPS, which provides the world’s top advertising agencies, financial firms, insurers and information technology companies with document conversion and workflow services to power the transition to digital.