Improving ap invoice processing requires consistent effort
It is perhaps a given that without improvement and upgradation, products, processes, things and even humans, who have evolved over millions of years, are necessary to prosper and, at the minimum, survive. Human beings compete for resources and the ones with the best ideas and strategies and tools end up winning. And that is what most humans wish to do; win. And that is unquestionably what companies want to do; win. In fact, the purpose of creating a company, which is an artificial entity, is to achieve success in its defined area of operation. For achieving success, one must be able to stand out in a competitive crowd. Not once, but again and again. For that, again, the company must keep improving its products, services, strategies, processes and everything else.
The cars we drive today don’t look and feel the same as cars fifty years back. Not just the looks, but even the technology that goes into the engines is different. Features like ‘cruise’ control and automatic transmissions were either not there or rare.
Why has this happened?
Because car companies have tried to improve their offerings.
And it does not end here. Car companies, and even non-car companies, are racing to create the smartest electric vehicles and batteries that can sustain them. Car and non-car companies, again, are racing to ‘autonomous’ vehicles that do not need a human driver. It never ends. We will never reach a state when one can sit back and say that whatever improvements had to be made have been made.
Why should improving ap invoice processing be any different?
As an integral business process, invoice processing has undergone changes in an effort to stay current with the times.
As a new entrant, oWorkers has relied on its ability to improve client operations to make a difference in the marketplace. The acceptance of its solutions is evident as it is already counted as one of the top three providers globally in the space of providing data based BPO services.
Suggestions for improving ap invoice processing
Through experience and involvement, committed processors start understanding systems and processes and the areas where improvements can deliver significant benefits. Some of this wisdom is presented in this section. It must be remembered that these are not one-time, but ongoing efforts, in an effort to keep building a better and better process.
Verification of invoice upfront
Despite the presence of processing technologies, invoice processing is still largely manual, at least at the start of the process, since it requires operating on a document that has been generated by another company’s, the supplier’s, system. Upfront verification ensures that the received invoice is accurate, pertains to your company, and, if the due date was today, would be processed and paid.
This avoids delays at the time the verification is done only at the time of payment, as the supplier might take time in correcting and resending it. While for the supplier it will mean delays in receiving the payment which could impact their cash flows, for the buyer it could result in spoiling the relationship and even being blacklisted.
Our human resources are our pride. At oWorkers, we have chosen to work with employed teams, and not freelancers and contractors that some of the other providers seem to prefer, as it reduces management effort and responsibility of growth and compliance. Our staff helps us execute on client engagements of various types, including verification of invoices that need to be paid.
Check for duplicate payments
Duplicate payments are costly for a business. They create unwarranted stress on cash resources and can sometimes be difficult to recover.
Though more common in places where manual processes are used, even companies using automated solutions with invoice matching capabilities, have been known to make duplicate payments.
Creating and constantly renewing a system of checks and balances, such as exception reports, can go a long way in eliminating this scourge and improving ap invoice processing.
oWorkers is evaluated by its staff on independent platforms such as Glassdoor. Both current as well as past employees, most of whom form a lifelong bond with the company even though no longer employed here, consistently rate us above 4.6 on a scale of 5. We pay all local and social taxes for our staff members and operate as a locally registered entity in all our global delivery locations.
While automation is an obvious suggestion, it needs to be understood that it is not a forever solution. Technologies are advancing more rapidly than many other things in our world. What is new today can be old and unsupported in 5 years. Hence, a continuous evaluation of emerging technologies for addressing business problems is required. Activities like GL (General Ledger) coding and matching invoices to purchase order accounts that take up a lot of manual time and effort can be done in the blink of an eye by the right software. A suitable AO automation solution can free up resources to perform activities where they can add greater value.
oWorkers is second to none in deploying automation for client projects.
How do we do it?
Our deep relationship with several technology companies gives us access to the latest in technology. Further, many of these technologies can be used by us for client projects.
Outsource invoice processing
Today, there is no limit to the activities that business process outsourcing (BPO) companies can provide. Invoice processing is not an obscure service being provided but a prominent service outsourced by millions of companies. Their reasons for outsourcing may vary, but they mostly experience benefits arising out of outsourcing. It enables them to efficiently handle a process which is not their core competence. At the same time, the outsourcer, with the aid of aggregated volumes across multiple clients, and the service being a revenue line and not a cost line, which is what it is for the client, is willing to invest in technology and process improvements. This, in turn, leads to improving ap invoice processing for the client as well.
Invoice processing is an area of expertise for oWorkers. With the ability to operate 24×7 across our three centers, and taking advantage of the time difference with global clients, we can speed up the turnaround time for all invoice processing related activities.
Fine tuning the payment time
Eventually the invoice needs to be settled by releasing payment. The payment has to be done in a manner that maximizes the benefit of any discounts and promotions offered by the supplier. At the same time the payment should be made only when it really needs to be.
This enables availability of those funds with your company for a longer period of time, either earning interest or avoiding payment of interest in case of an overdraft.
When our clients pay us, they pay for quality and efficiency. Many of them admit to saving almost 80% of their pre-outsourcing costs when they engage oWorkers.
Create performance standards and measurements
We know the adage, ‘if it can’t be measured it can’t be managed.’ One of the established practices in modern business today is the setting of relevant performance standards, or goals, for each role and its incumbent. These are designed to set expectations in terms of what is expected, and used as the benchmark against which actual performance is evaluated.
Hence, for improving ap invoice processing, if your company does not already have it, establish a set of standards or Key Performance Indicators (KPIs). Additionally, ensure that each of them has a reasonably transparent mechanism for collection of data that constitutes the outcome. And, most importantly, evaluate them regularly to ensure that they are relevant and reliable, and update them as and when required.
oWorkers has set a high benchmark by offering a choice to clients between an input based or output based pricing, with the choice resting with the client.
Paperless processing and archiving
Though linked to automation, this bears being called out as an independent recommendation. What sometimes happens with automation is that for approvals and other elements of workflow, documents are printed and circulated. If the payment authorization is on a physical piece of paper, it stands to reason that it will then also need to be maintained and archived, as that is the primary evidence of the authorization.
If the workflow, including authorization, can be handled through the platform, it reduces the need for paper to flow, as well as the need to store and archive it. This is even more relevant for large companies with distributed operations as tracking paper can be expensive and time consuming.
oWorkers has fostered a multi-ethnic and multi-cultural workforce which has given it the benefit of organically developed multilingual capability. Whether processing on paper, or through workflows, this core competence is helpful in processing clients transactions from around the world.
Implement a Purchase Order based system
Large corporations cannot live without a Purchase Order (PO) system as their requirements for purchases are generated by a number of different departments that could be physically located in many different places. The number of requirements generated can make even an automated system difficult to handle, including traditional trouble areas like duplicate payments. A PO based ordering process can substantially eliminate future challenges as it brings most of the approval processes up front and establishes an entry in the system that needs to be matched off when an invoice is being paid.
With our ability to attract employees, being a preferred employer in the local community, oWorkers can choose people for various client projects based on their ability, and train them accordingly.
Control over authorization
Money is fungible. Any money is good money unless taken through fraud or theft. Authorization and release of payment, hence, is a sensitive control area that needs to be balanced against the need for speed, since payments need to be made in a timely manner.
While a dual control mechanism is de rigueur, how that is handled is also important and can lead to improving ap invoice processing. Authority should be given based on position and seniority; the higher the amount the greater is the authority needed to pay. People with authority need to be periodically sensitized about the importance of releasing items in their queue in a timely manner. This may need to be done again and again.
We operate out of state-of-the-art secure facilities that are further augmented by our ISO certifications (27001:2013 & 9001:2015). We are also GDPR compliant, as we operate out of the Eurozone.
Improving ap invoice processing – a constant endeavor
As often noted, good quality does not occur by chance. It is the result of continuous effort. And it is worth striving for not only as a means of standing out from the crowd but even for basic survival. We need to remember that everyone else operating in the same marketplace is also doing so, striving for improvement, striving for quality. To not do so would be to invite disaster.
With companies striving for improvement in various spheres of their operations, many different methodologies have emerged that support the process of achieving that improvement. After all, a company acts in a deliberate manner. It seeks to act to further its interests and do so in a manner that can be understood and supported by a large number of people who are involved in it. That calls for a process or methodology to be followed even for making an improvement in a legacy process.
ISO (International Organization for Standardization), COPC (Customer Operations Performance Center), PCMM (Process Capability Maturity Model), Six Sigma, Lean, Kaizen, DMAIC (Define, Measure, Analyze, Improve, Control), PDCA (Plan, Do, Check, Act) and Total Quality are some that come to mind.
And each of them could also have many variants. The sheer variety of quality systems, and standards, available, and, in use, can be bewildering.
Perhaps expectedly, a class of specialists known as Quality Analysts or simply Quality professionals has emerged over the last few decades. Their role includes guiding companies as they seek to improve their processes and operations in order to stay competitive and create value for owners.
oWorkers has invested in a team of QAs who report to the senior management of the company and not to the delivery teams. This facilitates an independent review with the experienced leadership team jumping in when warranted. With over 20 years of hands-on experience, there are not many challenges that they cannot address.