How can I track changes made to invoices and the related invoice processes?
It’s a good thing if your AP software records all actions performed by users (roles) within the organization as well as any automatic actions (such as lifecycle changes and access rights). You might need to track the invoice history in case of e-discovery and any other disputes.
Why is it important to choose an AP software that can be customized according to our organization’s business logic?
It is critical as each company has its own approvers hierarchy, invoice categories, auto-approval rules, approval procedures, business logic, etc. Your AP vendor should provide approval routing based on many classifications, e.g. by a vendor, by invoice category, by other invoice attributes (such as business unit, project, site, and geography).
How does AP software check incoming invoices? Does it do it automatically?
When choosing an automatic solution, make sure the AP software automatically checks invoices for duplicates and matches them against the related purchase order and information stored in the system. Best-in-class AP software checks the correct entry of invoice data programmatically so that AP staff only gets involved in invoice validation and approval.
How long should invoices be stored in AP software repository?
When looking for a software, make sure invoices may be stored in the repository for any period of time, as defined by the customer. The AP software should support multiple retirement policies, but normally the retention period depends on the state law.
Does It Help Prevent Fraud?
You want an AP system that will help strengthen your internal controls and prevent fraud. Since money leaving your company goes through the AP department, it’s a prime target for fraudsters both within your company and outside it.
At its best, AP automation makes it much easier to employ 3-way matching, keep vendor information up to date, and track invoice activity. The system should have customization controls built into it that will help you catch duplicate or fraudulent invoices. Ask the AP software providers that you’re considering what tools their system provides for catching and preventing fraud.
What Search Methods Does It Support?
Information processed by an automated AP system won’t do much good if you can’t access it. You want an automated system that improves document management and workflow. Its electronic filing system should be easier to use than whatever system you had before.
Will I Be Able To Expand?
Keep future expansion in mind when you’re only looking at AP automation software. If you like this software system, will you be able to purchase other software modules from the same provider? Mixing-and-matching software rarely works well, so if you’re thinking of expanding your software suite, make sure your AP provider offers other mod.
What is Accounts Payable?
Accounts payable (AP) is when a company makes purchases from a vendor on credit that needs to be paid. Since accounts payable are a form of debt, it’s shown as a liability on a company’s balance sheet under short-term (or current) liabilities.
What is an eBilling System?
Savvy business owners know they need to stay on top of their accounts receivable so they can get paid within a reasonable time period. Doing so optimizes their cash flow and keeps the business afloat. But the billing process can be work-intensive and time-consuming. One surefire way to make sure receivables are paid on a timely basis with less work is through eBilling.
What is Accounts Receivable?
Accounts receivable are the outstanding bills (or money owed) from a business’s clients. Since these invoices are cash to be received, it’s recorded as an asset on the business’s balance sheet. Companies can maintain a healthy cash flow by operating with an efficient accounts payable and accounts receivable process.
How long does it take for an invoice/request for payment to be paid?
Accounts Payable makes every attempt to pay invoices and requests for payment within thirty (30) days after the invoice/request has been received. If an invoice/request needs to be paid sooner, Accounts Payable needs to be informed of the date when the payment is needed to ensure the payment will be ready.
What about reimbursements for dinner/lunch meetings?
Departments are required to substantiate the business purpose of a dinner/lunch meeting expense. Please provide us with the following on the entertainment expense form:
- The purpose of the meeting (i.e., the content of discussion);
- A list of attendees (names or group association);
- Itemized receipts with requests for payments;
- The date and location of the meeting, if not self-evident.
Is it okay to purchase flowers?
A department is not allowed to use funds to purchase flowers to honour an employee birthday, welcoming of a new child, sickness or bereavement.
How long does it take for a wire transfer to be processed?
Wire transfers are typically processed within three days of receipt, but it also depends on the payment terms of the invoice.
What if I need to send additional paperwork with my check request?
- Attach the additional paperwork to the invoice with a note to the Accounts Payable representative asking them to include the attached paperwork with the check.
When do I request a void or stop payment on an issued check?
- If the vendor has contacted you stating they have not received payment and it’s been two weeks since the check was issued.
- If your department requested a check that is no longer needed.
What do I do if a vendor contacts me and says they have not received their direct deposit?
Contact the Accounts Payable representative responsible for that vendor; they will review the transaction and provide the status of the payment.
What is the miscellaneous income?
Payments received for participant support, prizes, awards, honorariums, royalties, etc.
When is a stop payment placed on a check?
Accounts Payable will place a stop payment on a check when ten business days have passed since the check was mailed.
Who sets up vendors/individuals in the accounts payable database?
The administrative support assistant for AP and purchasing can tell you if someone has been set up in the database, provide the vendor code and confirm if a vendor information form is needed.
What is AP automation all about?
“A dollar saved is a dollar earned.” Why would you pay your suppliers more than you need or intended to?
Getting the actual invoice in front of the right people and giving them the right tools to quickly and thoroughly scrutinize, reject or approve is what it’s all about. Getting this done quickly and intuitively ever day generates real dollar savings, potentially on every single invoice received.
Reducing AP labour costs frees up resources for other tasks or can be translated into direct savings. With the right tools, automating the AP process is easy. However, what can not be automated is the actual approval. No system does that better than you and your employees.
Is the Accounts Payable process a purely administrative process that needs to “get done”?
It is not.
While the process of receiving, registering (data entry), PO matching, if applicable, and eventually booking in the DMS is mostly a purely administrative process, the approval process is not. The approval process is made up of business decisions, i.e. judgement calls.
This is especially true in businesses that operate on low margins—every transaction counts – BOTH sales-related and supplier-related.
Is a stringent, all-out use of Purchase Orders (POs) and subsequent automated invoice matching the answer?
The theory is when an invoice arrives; it will 98-100% mirror a PO and therefore be pre-approved and simply automatically booked and the PO cleared. In the real world, it’s NOT that simple. In fact, what we see is that LESS than 15% of invoices received actually mirror the PO enough for automated approval. Why? There are a host of reasons outside of the dealership’s control that prevent a high number of 1:1 matches.
The person filling out the PO just does not have ALL the information available at the time of ordering, nor do they have the time to find it. The supplier issued a faulty invoice. In some cases, one invoice may cover more than one PO, or the items on one PO are spread over more than one invoice.
This reality is, you need to optimize the process of receiving, approving and booking your vendor and supplier invoices to get to the actual savings, rather than just the theoretical ones. Moving invoices through the process fast and efficiently does not work unless the invoices are “on screen” from the beginning and remain an integrated part of the process throughout.
Any good solution has to be able to process all types of invoices, regardless of whether they arrive as paper, PDF or XML etc. Please do not get a system that requires you to dictate to your suppliers how and in what format they invoice you. Chances are you will not be able to do that. Once the invoices are received, either scanned in or input directly as PDFs, you can start taking advantage of some of the apparent automation tools the digital AP process offers.
What are the best automation points to focus on?
There are three processes that benefit from AP automation.
OCR reading is the automated machine translation of the image of the invoice and the first step in the automation process. OCR capabilities are common and widespread and an obvious time saver. Have a system do the data entry rather than doing it manually.
Getting an OCR system to read all the text and numbers of an invoice is not the difficult part.
Getting the system to understand what is what, and pick out the essential information IS the difficult part.
- Please do not get a system where this service is not included, or where you are left to find out how to make it work and maintain it on a daily basis.
- If the OCR part of the system requires you to do set up work on each supplier’s invoice lay out, do not get it.
- If the AP automation system needs you to buy a separate OCR package and make it work with the AP part, do not get it.
2.Getting the invoice in front of the right decision makers
Setting the system up to help do this process automatically is the second obvious area to add speed and cut back on the “busy work”.
This is, however, also an area where it is easy to overdo it. Here is what we have learned: Setting up automated rules that shoot out invoices can clutter the process.
A good rule-of-thumb is to let the system decide and act when you are confident it will be right in 90% of the cases for any particular rule. If the percentage is lower, you risk cluttering up the system, slowing the processing down and frustrating the users.
The third obvious automation opportunity is the cost distribution, the coding. Accounting for the cost from the invoice can be automated; the question is where to begin and how to avoid overdoing it.
As with automating the flow, there are some very low hanging fruits to pick first.
If POs are used, the accounting information may already be part of the PO. So, matching the PO with the invoice by definition automates the cost distribution. This is, however ONLY true if the PO has the right information and actually mirrors the invoice received!
If the use of POs is important in your business, make sure your AP system can easily, automatically and frequently import open POs. Set up a rule in your AP automation system that pics the right G/L account every time an invoice from that supplier is received. Good AP automation systems offer accounting templates, which support fixed percentage splits between G/L accounts.
Make sure that your systems’ supplier is willing and able to work with you on a continuous basis regarding this as an INCLUDED part of your deal.
Does the system have to integrate with my DMS?
Yes, integration with your DMS is crucial. For the AP-automation system to generate real savings, the right information must be available and up to date in the AP system so the system can deliver 100% completed payables for automated posting in the DMS.
The essential Master Data from the DMS includes:
- All active vendor accounts
- All G/L accounts
- All other dimensions or accounts used when coding AP invoices
- Open POs, including line items
If you use POs, the AP automation system must have access to all open POs to match with the appropriate invoice. It is also essential that the AP automation system displays the PO line items.
When the approval and cost Distribution and or PO matching is completed, the AP automation system will transfer a file to the bookkeeping system.
Any good AP automation systems’ interface will not require you to add or change information once that process is done. With a good interface, your job is limited to accepting the file/batch and allowing the automated booking.
Do not get a system that requires you to add or rework information after it has been transferred to the bookkeeping system.
Get a system that can be set up in a way that ensures all information is available to complete the processing before transferring to the bookkeeping system—having to rework or update after the transfer interferes with the integrity of the transaction and adds unnecessary busywork.
A good interface must be able to fully and accurately support the following
- Post on the G/L account/control numbers etc.
- Post on the Vendor account
- Update and close POs
What strategies do you use to keep track of accounts, tasks and stay organized? How do you decide which task to tackle first?
Accounts payable specialist positions require superb organization skills to keep track of financial documents. While many of the technical skills accounts payable specialists use every day can be learned on the job, organization is more difficult to teach. Highly organized candidates will cite specific strategies they use to stay organized while less organized candidates will have a more general response to this question. What to look for in an answer:
- Level of detail in the response
- How the applicant approaches scheduling and prioritizing tasks
- Past experience overcoming organizational challenges
Imagine that while reviewing vendor invoices, you discover that a vendor has underbilled us compared to our purchase order records. What do you do?
Accounts payable specialists are often tasked with maintaining vendor relationships through prompt payment of bills and careful handling of billing discrepancies. Most companies have clear policies on how to record and reconcile account discrepancies. This question reveals their general knowledge of record-keeping as well as their ability to follow company policy. It can also give insight into their customer relations skills. What to look for in an answer:
- Attitude to company policy
- Willingness to seek help
- Recognition of the need to reconcile the accounts
Can I extend business travel for personal purposes?
Yes, an employee may extend business travel for personal purposes.
The employee will be reimbursed for expenses incurred up to the point when he/she would have returned under normal circumstances. If extending travel causes the cost of transportation to increase, the employee is liable for paying the incremental cost of transportation. Employees are expected to take appropriate leave in accordance with the leave policy.
May I use a rental car while on business travel?
Use of a rental car is prohibited unless it is the most economical means of transportation available (e.g., less expensive than a taxi or airport shuttle). The rental car may be used for business purposes only. The employee must pay for any incremental cost of personal use of the vehicle.
What is a virtual card?
A Virtual Card is a randomized 16-digit number that is authorized for a specific payment amount. The number, or “token,” can only be charged once, and only for the exact amount specified. Virtual Cards are, by far the most secure and cost-effective option when paying your vendors. You can also earn rebates on every successful payment made with MineralTree’s virtual card.
Why Should I Automate Accounts Payable?
Manual processing of invoices is time-consuming and subject to both errors and fraud. According to Aberdeen, manual processing of invoices takes on average 14.2 days. AP Automation can cut that time in half or more while improving accuracy and helping you close your books faster.
What are the benefits of SaaS and running AP Automation in the cloud?
First, AP teams tend to be distributed especially in larger organizations. A distributed, but accessible and reliably-connected infrastructure is required. SaaS applications fill this need. In fact, most ERP applications are being moved to the cloud for the same reason.
Secondly, SaaS solutions don’t require capital outlays for hardware and software. Instead, a company pays an annual subscription fee, based on the number of invoices processed. As a result, the total cost of ownership for a SaaS solution is much less than an on-premise equivalent.
What are Vendor Balances?
Vendor Balances are comprised on the list of Accounts Payable reports in SAP. The report lists balances due to vendor(s) at the beginning of the financial period, amounts due during the reporting period and all debits and credits made on the account during the reporting period.
Closing balances specify current past due to amounts. Listings are separate for transactions estimated non-standard by the user. Running balances are included at the end of each page. Start of List and End of List titles assist with reading the list.