Being at the helm of a company’s finances is no easy thing. As a CFO, I find that the old adage “knowledge is power” certainly applies. Perhaps even more true is that access to information is liberating.
That’s especially true for issues around risk and compliance. Advantages like having visibility into accounts payable information, allowing it to be easily accessed and audited, knowing that the AP process is transparent and subject to oversight, and having a single checkpoint for all invoices, not only simplifies our work, it also lets us sleep better at night.
There are really 3 keys to using AP Automation to reduce risk and increase compliance.
One, enforce your delegation of authority.
If your company is like most of our client’s organizations you have a lot of “tribal knowledge” in your Accounts Payable department. Which is great, as long as those people are there when you need them and they don’t use their knowledge to cut corners under pressure. But if you’re depending on that tribal knowledge and the person whose head it’s stored in happens to be on vacation or, worst case, retires, or if they think, “It won’t hurt to route this invoice to John instead of Joe just this once,” then that dependence can backfire.
At DataServ we work with our clients to capture that “tribal knowledge” and integrate it into the AP process while still following best practices. When you’re using a good automation system you have a systematic approval matrix that enforces delegation of authority and creates an easy to access record of every point of approval that the invoice goes through as it moves through your process – and never goes on vacation!
Not only does this reduce risk because your invoices can be approved so much more quickly, you won’t have those crisis situations where an invoice needs to bypass a point in the matrix in order to be paid before late fees are incurred. Your invoices will also be coded as early as possible in your process so you’ll know what funding account or budget line item each amount goes against.
Two, gain total visibility into your AP data before it is in your ERP.
Good financial decisions and risk management requires that you be proactive not reactive. That’s difficult if you don’t know what is circulating out there in inboxes or on desks because you don’t really know what the true obligations of the business are. Waiting until invoices are recorded in your ERP to be able to take stock of everything outstanding makes it more difficult to plan out payments and manage cash. That’s why our solution provides a single entry point for all incoming invoices and a system that gives you flexible reporting of the status of everything outstanding. This gives you the ability to improve your investment strategy as well as close your books each period in a more timely manner and with greater accuracy.
Three, know that your data is easy to access, easy to audit, and properly archived.
These are three basics of data management that not all automation processes do well. Not only does DataServ’s system organize and store your documents and data so that you have access to it anytime from anywhere, the retrieval and reporting make it easy to audit – whether for an internal audit or an external, sales/use tax, or shareholder audit.
To manage your liability you also have to appropriately retain and purge documents and data. Retention management is built into our process. All documents that go through our Digital Mailroom are shredded and destroyed within 90 days of being scanned and electronic documents are purged at the appropriate time. Data is also archived and purged on a set schedule.
I’m never going to say that being in charge of any part of a company’s finances is easy. But good automation and data access can certainly reduce risk.