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Accounts Payable Operations – Accounts Payable Team Can’t Get into the Office?

When it comes to Accounts Payable, what do you think of when you hear the word “Disaster”?

First, let’s consider the definition. A disaster is a severe interruption causing the inability to function as usual.

Does your company have a Disaster Recovery Plan? Is the Accounts Payable operation sufficiently covered?

For this article, I am assuming the answer is yes but what would have to happen before the Plan is activated?

Over the course of my career, the company’s Disaster Recovery Plan was put into action only once. Fortunately, the event did not affect the building or the contents but the building was shut down for a week. Once opened, due to the impact of the severe weather, many employees could not report to work.

How long would it take your Accounts Payable Operation to get back on track? Phones were ringing off the hook once we returned, never mind the number of voice mails. Rightfully so, vendors were looking for payments promised to them the prior week and managers, not all in the same location, were asking why some costs had not hit their projects yet. Did I mention this all happened at quarter-end?

How were we able to get back on track within days of returning to the office? The first step was to release payments for all invoices that had already been processed and were due.

Then we got busy processing invoices. Yes, processing. After being shut down for a week, you might expect that we received piles of mail that first day back. Imagine the time you would need to open a week’s worth of envelopes. Additionally, invoices send by email would need to be printed and added to those mailed before they could be sorted by PO versus Non-PO, right?

Just a year prior, the company had implemented Accounts Payable Workflow Software as a Service (SaaS). Even though we were unable to be in the office, any invoices emailed in were electronically loaded into the software almost immediately. Invoices mailed by the vendors were collected from the Post Office, scanned and uploaded into the system by a third party provider located outside of the “disaster” area.

Also, due to the automation provided by the Workflow System, up to 47% of the Purchase Order invoices received were processed without anyone needing to “touch” them since Purchase Orders were flagged as received by the receiving locations across North America. Non-PO invoices were getting automatically routed to reviewers and approvers based on business rules set-up in the System. Since the shutdown due to weather was anticipated, employees, including Accounts Payable Processors, were told to bring home their laptops. As long as employees had electricity, they could still perform some assigned actions.

As mentioned earlier, this all happened within a week of a quarter-end. Would your Accounts Payable organization be able to find all Non-PO invoices, based on specific criteria, that needed to be processed or accrued within minutes or would they need to rifle through stacks of paper? Since the invoices were in the workflow system, we were able to use Search Functionality to find the most critical invoices. Those that could be were approved in the Workflow System then electronically uploaded into the ERP and processed in time for month-end reporting. A report of those that could not be posted by month-end was easily pulled and sent to the General Accounting team for accrual purposes. There was no delay in the month-end reporting on the part of Accounts Payable.

The following week, we still had more unprocessed invoices in the Workflow System than our normal baseline numbers. Some were due to goods still not being received as a result of the bad weather across many states, others still had not been reviewed or approved. Fortunately, there was still time before the newer invoices were due. Again, using the Search Functionality available in the AP Workflow system, it was easy to find unprocessed invoices by expected due dates and assign the tasks of getting them addressed; whether the issue was “manually” matching the invoices to the PO’s within the system or following up on other exceptions with reviewers and approvers.

Yes, some overtime hours had to be paid, but by the end of that second week, we were back to our normal baseline numbers.

Is your Accounts Payable department still a manual operation? How long would it take to recover from a Disaster or from an illness hitting the majority of the team? Have you thought about Accounts Payable Workflow Software as a Service? Are you intimidated by the subject?

Ask for help!

CS Process Flows, LLC has the experience, the resources and the contacts to assist you; from answering your questions about the subject or helping to implement a system. Contact us do discuss just how much improvement you want to see in your Accounts Payable Operation.

Written by Anne Wheeler of CS Process Flows, LLC

Anne Wheeler is a Consultant and Project Manager for hire specializing in Accounts Payable processes, automation and systems.