In our last post, we talked about how getting rid of the “paper avalanche” is the first step in reaching what Ardent Partners calls higher ground.
Getting rid of paper is the first step in reaching higher ground, not the last. It is absolutely critical, but there is more work yet to be done after that paper avalanche is conquered.
Do you remember studying Maslow’s hierarchy of needs? If you need a reminder, the crux of Abraham Maslow’s theory goes like this: a person can’t reach the pinnacle of a human’s needs – self-actualization – unless other, more basic needs are met. The base of the pyramid that illustrates this point represents the most basic physiological needs, such as food, water and shelter. Those needs met, a person can then focus on safety, before moving up the pyramid to needs like love and belonging before achieving self-esteem and, finally, self-actualization.
What does this have to do with AP automation? In their latest report “ePayables 2015: Higher Ground,” Ardent Partners surveyed a variety of best-in-class companies to see what their priorities and challenges are, and how they are making the jump to the “next level.”
When we talk about the “next level” in accounts payable, it could mean a variety of things depending on the level your AP department is on. Maybe your next level is streamlining your process. Or, perhaps it’s something more advanced like pursuing early payment discounts or rebates.
Whatever your next level is, it all starts by eliminating paper from your AP process. As the Ardent Partners report says, “… the top path to reaching the ‘next level’ of performance in AP is to reduce (or better manage) invoice exceptions because they are frequently at the very core of why an AP operation is under-performing.”
Examples of these invoice exceptions could include discrepancies between a purchase order and an invoice (cited by 68% of those surveyed as an issue), the lack of a purchase order altogether (37%), a bottleneck in the invoice approval process (31%), or an error on the purchase order (20%).
These exceptions can be easily removed through an automated process, after which your AP department can really start pursuing some of the strategic, higher-level tasks above. But you can’t pursue them while you’re fighting the paper avalanche.
Like Maslow’s hierarchy of needs, you have to get rid of the paper problem before you can even pursue the other best practices that Ardent Partners mentions in their report.