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10 Tips for Accounts Payable Success in 2015

January 14, 2015

If it isn’t broken, why fix it? That’s the general sentiment when it comes to companies’ current vendor approval process, and the process that’s in place for adding new vendors. Why is there so much hesitation around optimizing these processes? The simple truth is that doing anything new can be risky. The risk is that you’re talking about changing a process that, let’s face it, has worked and is probably not all that bad. It’s been my experience that accounting and finance teams usually assess whether or not a change is worthwhile by weighing the difficulty of the change against the benefit and impact to the organization. That’s why contemplating a new vendor approval process can sit on the back burner.

Evaluation is important, because over time a process can get complacent. The down side with a complacent process is that people become overly familiar with it, start to find ways around it, and get lackadaisical resulting in errors.

When evaluating your vendor approval process, here are 10 things you should look at to improve your current process:

10. Evaluate paperless options – Paper has intrinsic problems, because paper invoices can get lost and can have incomplete information. Also, paper has to be manually passed around for approvals, which creates lengthy approval times and can result in late fees. When you automate your AP processes, these problems dissipate.

9. Let them know you are watching – If you are automated, then don’t make it a mystery that the system tracks everything about the process. Therefore, there is visibility into every part of the process and late approvers are easy to identify. If you aren’t automated, then make sure that you have internal audit procedures to ensure everyone is held accountable.

8. Define “approval” – The people who typically feel burdened by having to approve are usually the people that don’t feel as though they need to be involved in the approval process. It’s important to define what you want the person to approve, such as approval for budget or approval for completed work.

7. Use dollar breaks – Automatic breaks are great to ensure that only people see and approve the vendors that need their attention. Certain vendors are work more than others.

6. Don’t be the bad guy/gal – When you automate, make the automation software the “bad person.” The beauty of an automated AP process is that there are rules in place for approvals, and the software will do the job of sending out reminders for invoices and payments that need to be approved. The software does it automatically, so that not only do you not have to think about it or manually run a report from an excel spreadsheet, you also don’t have to go in person to address the approval or have the email come from you.

5. Make it easy – If the approval process you have in place is easy to understand and follow, then the people that have do the approvals will be inclined to approve things sooner and with more frequency. An example of making things easier would be to have all vendors in a queue with an email reminder.

4. No repeats – Make sure that a person is not in the approval process more than once doing different approvals.

3. Gang’s all here – Certain vendors can be approved by more than one person, so it lessens the burden on one person to approve vendors and speeds up the process.

2. Plan your work – When people know their role in the approval process, then they understand that there are dependencies to their approval and will be more likely to approve faster.

The Number 1 Tip – Go Mobile! – People think that if they are at a standstill, then they need to be on their smart phone – give them the joy of doing work while they are waiting. If you use an automated AP process, then they should be able to login to a portal and approve invoices and payments from wherever they are.

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