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E-invoicing News

An Informative news and blog about iPayables and the electronic invoicing industry

Like many best practices, moderation is the best implementation practice.  Instead practitioners take the “if a little is good, a lot must be great” approach and end up drowning in the thing that was supposed to make life easier. This is often the case with Accounts Payable Workflow.  The promise of being able to route invoices electronically paints a sparkling picture of documents zipping around the organization at light speed, all under the watchful eye of Accounts Payable. This is exactly how workflow is supposed to work but often, given the ease of manipulating the workflow routes become too complex or AP becomes a bottleneck in the flow.

The first problem of complexity usually comes about because insufficient attention is given to exceptions.  Instead of addressing an underlying business process problem related to exception handling the “just add another rule” mentality leads to a maze of conflicting and often compounding workflow rules.  The awesome ability to direct the flow invoices on the fly is now the source of many problems.  Accounts Payable sometimes take the somewhat opposite approach.  “The field is too busy/stupid/lazy to properly handle these invoices. We’ll take care of it.”  Routing every invoice to AP in organizations of any significant size is the death nail of workflow.  Out the window go 90% of the benefits and efficiency that might have been gained.  Of course there are plenty of reasons invoices get routed to AP.  Yes new rules are needed to handle those special cases.  The road to logjam is paved with good reasons.  Follow these simple rules to make sure your electronic workflow delivers:

1)      Follow the 80/20 rule.  Maybe even 95/5.  The vast majority of invoices should enter the organization using a simple key.  Either Requestor, Buyer, Location or some other value that the supplier may know.  Relate this key to the starting point in the organization.  Don’t start invoices in AP and send them out from there.

2)      Utilize some kind of hierarchy to advance invoices along the route as needed for additional approvals.  This may be reporting structure based or business based.  Again, 80% of invoices should follow this structure without fail.

3)      Utilize a matrix of approval limits to determine when an invoice is finally approved for payment.

4)      Limit AP review of invoices to actual trouble suppliers, business units or spend.

Of course AP Workflow included in iPayables InvoiceWorks helps enforce all of these best practices and includes all the bells and whistles. (Vacation Reroute anyone?).

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