Paperless Accounts Payable?


In many businesses today the Accounts Payable (AP) department is a hub of activity and the place where the buck literally stops.  The AP department is where a bill is documented, filed, approved, budgeted, job costed, re-billed to customers, compliance is satisfied, matched with purchasing documents, entered into AP, and in some cases the price is (re)negotiated.  All this work is happening after the purchase when it should all be happening before the purchase.  The AP department is always going to be the last line of defense to control expenses but I contend that we over burden our AP department.   We pile too much manual work onto the AP department that would be better managed at the source of the transaction. 

The solution is a requisition system that is web based and integrated with your accounting system.  Basically, once a purchase request is approved, it then goes to purchasing or goes right to AP for matching and payment.  Here is a typical requisition and approval processes: 

A researcher requests  a new laptop to do his job because of increased travel to clients.  The researcher enters the requisition system and is presented with a catalog of company approved laptops and options.  He picks the laptop that he wants and once saved it kicks off a workflow approval process.  Once he saves his requisition it is forwarded to his manager for approval.  The manager is able to check his budget and approves the expenditure.  In this company all laptops must be approved by the IT department so that it is the next step in the approval process.  The IT Manager reviews the purchase and gives the final approval.  Now the approved requisition can is forward to purchasing.  The purchasing manager hits one button that converts the requisition into a purchase order and he is able to combine another requisition for a laptop onto the same PO and qualifies for free shipping.  The completed PO is routed to AP where is automatically creates the voucher and paid on terms through the standard AP process.  

The number of workflows, levels of approvals, different routes based on dollar amount, budget, project number, and management level in the company are almost limitless.  In one case we setup a workflow that required two approvals from a VP level executive for expenditures over 25,000.

If your AP volume is overrunning your AP department or adding more AP processing than your current controller can handle, you should consider a requisition system.  We like a package called Reqlogic which works with all the Dynamics products.  It will improve spending controls, give you a better look at upcoming expenses, streamline AP, allow purchasing to do a better job and allow you to go paperless.

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Posted in AccuNet Software & Services, Microsoft Dynamics SL, President's Rant, Third Party ISVs/Products

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