Problem-Analysis-Solution: When defects in your payables process rob your productivity and threaten the efficiency of your accounts payable department, then it is time to consider how to reduce your company’s defect rate on invoice processing.

Get Your Payables Process Right, the First Time

Benefits of Implementing a Procurement to Pay Platform:  This is the first in a series of SnapAP Blog Posts on what frequently goes wrong in accounts payable processing of invoices and why a focus on Procurement to Pay is the key to business process efficiency.

The first sign you have trouble in your payables department is a consistent double-digit defect rate on invoice payables processing.
Trying to find and correct mistakes on supplier invoices resemble trying to build a straight, strong wall with crooked lumber. The higher you go, the more crooked lumber you use, the more the final structure is out of true, as carpenters say.
As a result, you spend more time and effort at the finishing stage for acceptance, because everything went wrong at the beginning. So it is with payables.
                                 For businesses, incurring too much cost correcting too many errors
                                                   at the end of the purchasing process is also true of the procurement process.
                                                            A flawed start approach causes costly errors in the procure-to-payment process
                                                  that wastes valuable time and energy in the accounts payable department.
The cost and loss from invoice defects will decrease the productivity of your payables staff and slow down the payment process.
  • Slow payment to suppliers results in missed opportunities for discounts.
  • Delayed payment can cause strained relationships with suppliers, not to mention frustrated employees who report that they just can’t get ahead of the time lag problem.
A random survey of AP department managers reports that over 30% of invoices contain defects.
These are defect mistakes made in preparing the original invoices or result from changes that are not captured accurately in delivery acceptance. Whatever the cause, it all leads to an endless process of uncovering and fixing errors.
This is where costs become hidden and more costly as more staff time and effort is made to correct the myriad of mistakes and missing paperwork trail.
  • Ironically, OCR scanning of invoices only accelerates the defect creation problem and promotes the mistakes and errors into even a digital process, which in effect automates the defect rates instead of solving the accuracy problem of garbage in-garbage out.
SnapAP thought thru this flawed invoice acceptance process before programming the SnapAP solution.
Our developers decided if they could get the process started right at the first step in ordering( procurement) they could win the battle to reduce errors. As a result, SnapAP’s solution encourages purchasers to put more energy into getting the first steps of procurement correct. By starting right, then less time and cost is required at the back end of the process in completing payments to suppliers.
Here’s how SnapAP does things differently in software automation.
First, the SnapAP procurement to pay process starts with the end result in mind.
  • A SnapAP solution implementation means that all of your suppliers will receive approved purchase orders.
  • These purchase orders are sent electronically to the supplier directly, which provides them with the opportunity for up-front review of what they are agreeing to and including in their invoice.
  • The beauty of this arrangement is that the supplier takes the opportunity and the responsibility, as well as the pre-emptive effort to ensure that the purchase order received and agreed to, exactly matches the invoice they will also return electronically.
This early purchase process step creates its own efficiency and solution to high defect losses.
It is in the supplier’s personal best interests and cash flow management to compare their purchase orders to their invoice description and costing figures before sending them back. This one simple step in an often complex process ensures the accuracy of the invoices sent to the purchaser.
Here’s the double payoff for both purchaser and supplier.
For the Supplier: By using SnapAP’s focus on creating accurate PO-in and accurate invoice-out process, defect rates are immediately lowered to below 2% from often double-digit defect rates.
  • Customers using SnapAP report that their AP department immediately increases their processing efficiency and productivity with fewer costly labour hours.
For the Purchaser:  For our customers, the SnapAP procurement and ordering process is easy to use and clear in its purposes.
  • By design, the SnapAP procure to pay solution gains consensus from all involved on the front end, leading to enhanced relationships between you and your suppliers. The big bonus we often hear about is that our customers spend much less time dealing with time-consuming supplier inquiries. Suppliers can securely log in to their portal page and view the progress of their payment in a transparent,  and supportive manner.
SnapAP is confident that any business with invoice volume can achieve greater savings with payables automation.
  • The SnapAP Savings Calculator app will help you analyze the cost of manual invoice processing that you are incurring now, and once submitted will project back the cost savings calculation specific to your invoice volume.
  • SnapAP’s solution advisors are happy to customize a software demo based on your description of your company’s procurement and payables volume. During the live site demo, you will view the payables cost control dashboard, which will lead your payables team to a more streamlined process for your business.
  • An additional benefit to invoice automation is an enhanced relationship with all your suppliers, as well as securing more cost savings from meeting discount performance payment schedules.
  • Reducing the stress of invoice matching and going paperless also improves the overall morale for your AP department. Particularly, as they evolve from a cost centre to an enhanced business performance contributor.
We will help you make it a clear beneficial choice with cost-saving projections on all the financial gains you will enjoy from making the change to accounts payable automation by implementing a procurement to pay platform from SnapAP.
Learn More about how SnapAP can help your invoice defect rate: Eliminate Defects in Purchasing and Invoice Payment
Next in our Self Help Series: Eliminating Poor Supplier Relationships.