Making the decision to automate your accounts payable (AP) process is no longer as much a question of if, it’s a question of when. Many companies are realizing the benefits of automation, like reducing their processing costs, eliminating paper, and increasing control over payments with configurable workflows. In today’s blog, Sage Intacct user Kristine Frost of Barfly Ventures tells us how her accounting department improved operations by automating AP with AvidXchange. You’ll learn how Barfly Ventures evaluated, selected, and implemented AvidXchange as its AP automation solution and we’ll chat about brewpubs, year-end best practices, and the final days of the filing cabinet.
So, Kristine, tell me a little about yourself…
Kristine: I’m an Accounts Manager for BarFly Ventures in Grand Rapids, Michigan. BarFly Ventures is the parent company behind some great restaurants and bars, including HopCat, Stella’s Lounge, Grand Rapids Brewing Co., and The Waldron Public House. We have about 17 locations currently, and our brewpubs offer a wide selection of beers – usually, each store will have around 100 taps.
As Accounts Manager, I oversee the Accounts Payable department. I perform the monthly closing of financial records and posting of month-end and quarterly-end information while ensuring the accuracy of financial statements.
Sounds like a pretty fun job, all things considered…
Kristine: [laughs] Yeah, I mean if you’re doing accounting, at least the atmosphere makes it more enjoyable!
What was BarFly’s accounts payable process like before implementing AvidXchange’s AP and Payment Automation solution?
Kristine: It was very paper-based; everything was manual. For every single piece of paper that came to our office, we had to open it, review it, date and stamp it, enter it into our system, and get it approved. Then we had to process the check, stuff it in an envelope, put a stamp on it, and mail it. It was often an exhaustive procedure just to get one invoice in and out of our hands.
Because everything was very manual and we were caught up in all these paper-based processes, we didn’t have a lot of visibility into our invoices – if it had been approved, or if it had just been sitting on someone’s desk for a couple of weeks. Things often got lost in the paper shuffle.
How has the process improved by automating it?
Kristine: Implementing AvidXchange has been a lifesaver, quite honestly. In terms of scalability, it’s been great because we’re able to do more work with the same staff of two people. Now that we’ve got rid of paper, we have more visibility into the process. We can see what’s where, what’s not, what’s pending, etc. It’s a much clearer picture.
I have a lot to do with AvidXchange as far as the batching process. I batch all of our invoices into our accounting system. I go in and review and approve. When there are more issues with invoices as far as more details that need a little bit more approval process, I usually take over.
On the payment side of things, AvidPay has been very beneficial. We were printing 300-400 checks per week, and the process of printing each check, attaching a pay stub to an invoice, filing that invoice, and putting it in an envelope and stamping it was at least a good day’s work.
And because AvidXchange usually follows up within 21 days, we no longer have to perform maintenance on our checkbook. Previously, we would have to follow up on stale, dated checked – but we would end up waiting like six months or something because we just didn’t have the time and the volume was huge. Now we don’t have hardly any outstanding checks; they’re always canceled or reissued, with AvidXchange contacting our vendors to let them know. That’s been huge for us.
Can you describe your month-end and quarterly close processes before automation?
Kristine: With our month-end closing process, we have three business days to close our books. Anything under $500 we don’t even look at, and we don’t accrue for. When it comes to the end of the quarter, we keep our books open an extra day, just in case we have invoices coming in, and accrue for everything. For the year-end close, it’s similar to our quarterly process, but we may leave the books open a few more days.
How has AvidXchange helped with these processes?
Kristine: As I mentioned before, we have so much more visibility into our invoices. That has been huge for us. I can go in and pull all the invoices that are unbatched for that month, and we can set up our accrual from there, where before we would have to wait for the mail. Now everything is in the system and easily accessible. We can export the data and create pivot tables with it, which has been a huge time saver.
Do you have any best practices for keeping the master vendor file updated or 1099 maintenance?
Kristine: We haven’t had to do a lot of maintenance with our vendor file yet because it’s only been around eight months since we implemented AvidXchange. We did, however, develop a vendor checklist. Every time we get a new vendor, we submit to them a vendor checklist, and it gives them a list of everything we need to pay them. We need a copy of their W-9, a certificate of liability insurance, etc. That’s been massively helpful in making sure information is accurate and we’re not creating duplicate entries. If we ever get a notification that we don’t use a vendor anymore, we mark them as inactive.
Thanks to the vendor checklist, we don’t deal with many 1099s, simply because we hold payment until we receive a W-9 from the vendor. We don’t even set them up in our system, so we don’t have much maintenance around 1099s. Once we receive all the paperwork requested as part of the checklist, we set them up.
Year-end can be a stressful time for an AP department. How do you delegate tasks or keep up team morale during that time?
Kristine: Honestly, I don’t think it will be that stressful, simply because it’s an extension of our quarterly close, and that’s a breeze now with AvidXchange. It used to be a daunting task to track down every invoice, but now they’re all right there in the system. Another thing that helps with staffing concerns during end-of-year is that everybody in our department is cross-trained on all our jobs. If someone’s on vacation or out sick, another member of the team can step in and handle their responsibilities, or if someone’s ahead of schedule, they can help in another area.
As I mentioned earlier, a key benefit of automation is scalability, and I think that factors into morale too because even if I took time off around the holidays, I can work remotely with AvidXchange. It’s cloud-based, so if you don’t necessarily want to be in the office, you can approve invoices and do everything you need to do nearly anytime, anywhere.
Are there any specific reports you like to create in AvidXchange that are beneficial to quarterly closing or the upcoming year-end close?
Kristine: I’m a portal admin, so I can go in and look at everybody’s queue and see what’s in there. That’s huge for me. I can shoot them an email saying, “Hey, give me a status on this invoice,” or, “Can you please go in and approve these?” It just gives me a better idea of what’s out there.
At the end of the month, after our three-day window closes, I will pull a report that has all of our unbatched invoices – everything from disputed and pending invoices. We use that report to develop our accrual for any invoices that have not made it all the way through the system.
And are there any specific tools or applications that you use in addition to AvidXchange that you find particularly useful?
Kristine: We use pivot tables. I’ll pull a report of all of our unbatched invoices, and then I’ll create a pivot table breaking it down by location and dollar amount so we can determine if there’s something we want to accrue for or not.
One big thing we’re working on is a vendor compliance initiative – making sure that invoices are being sent directly to AvidXchange and not to us. I can pull a vendor compliance report that shows me where all the invoices came from. I can then contact any vendors who are still sending invoices to our site and correct that behavior.
What’s the audit process like in an automated environment?
Kristine: We’re frequently under an audit. We had an audit in February-March, shortly after we implemented AvidXchange, and we have another one coming up in November. It’s been amazing for both the auditors and us. Before automating, auditors would request hundreds of random invoices, and we’d have to spend a day or more digging through filing cabinets to find them. Now we give them read-only access to the portal and they can view anything they want with the click of a button.
AvidXchange documents the workflow and the history of every invoice, so the auditor can see where it’s been. Before, we couldn’t track if an invoice was approved unless somebody wrote a note that said, “Approved by so and so,” but I mean when you have a minimum of 1,800 invoices per month, that just doesn’t happen.
Another added benefit: we have no more filings. We don’t even have the file cabinets anymore. We don’t have to pay somebody to file and store all of our paper!
I feel like file cabinet manufacturers are probably not that pleased with us! OK, final question: Now that you’re almost a year into using AvidXchange, can you imagine going back to a manual, paper-based process?
Kristine: [laughs] That would be awful! Automation has been huge for us. Just the ability to have visibility into invoices is massive. We’ve had so many people asking to see invoices, and now they just click a button to view them.
We’re growing at a pace of about four stores a year. We would have had to keep adding at least one staff member a year just to keep up with the volume if it wasn’t for automation!