Integrating Accounts Payable and e-Procurement for Effective Automation
A longtime client of DataServ has had a Purchase to Pay (P2P) solution in place for more than six years that has consistently delivered timely, accurate invoice processing. At a certain point in time, it was determined that the procurement process could benefit from new purchase order (PO) automation. The PO requisition project soon identified several potential vendors; unfortunately, it also began to grow in scope to include not only “core” PO functions, but downstream financial operations (automated approval workflow and three-way matching for PO invoices) as well. These expanded services helped justify the investment and the client’s procurement team was assured that these functions could be easily accommodated in the e-procurement software. Unfortunately, this expanded functionality was not reviewed nor vetted with the accounts payable (AP) staff.
The client had worked with DataServ to install an automated workflow for non-PO invoices with approver routing. With the launch of this new e-procurement system, DataServ was told
much of its workflow solution would be replaced, although the client still wished to use DataServ’s Digital Mailroom and data integration services. DataServ worked with the client to ensure a smooth transition to the new vendor, all along identifying risks to their organization and working hard to ensure that the quality of their financial operations did not suffer.
After many months of trying to implement the new e-procurement system, it was determined that the new vendor wasn’t able to deliver either the basic workflow capabilities or the three-way match processes, resulting in numerous delays, frustrated employees and an overall deterioration in the P2P process. After more than a year of trying to make the e-procurement solution work, the client decided to scale back the e-procurement solution to focus on PO generation only and to reinstall DataServ’s workflow automation.
✔ Successful P2P process automation requires a complete understanding of the full transaction cycle to ensure that data capture, document accessibility, workflow security and controls all work in sync to create a seamlessly integrated workflow. If you are considering a procurement-based solution, check the vendor’s experience and credentials, as many do not have deep AP automation experience or capabilities.
✔ The further you move down the P2P business process, the more you need to concern yourself with controls and quality output and reporting. POs need to be part of your solution, but they cannot drive the decision independent of the accounting group. At the end of the day, the accounting function is responsible for the integrity and quality of the financial statements. Having firm control of the organization’s AP process is one key to effective oversight and an important responsibility of the accounting and control function.
✔ Clear lines of accountability can prevent “scope creep.” When e-procurement initiatives are started in the organization, accounting and procurement need to be clear on lines of authority and how those pertain to the P2P cycle and determine where procurement responsibilities end and accounting\payable responsibilities begin. This understanding up front will promote healthy collaboration and ensure the appropriate scope of the initiative.
Providing an effective solution for Purchase to Pay automation requires a thorough understanding of the entire transaction process, along with the capabilities to help guide organizations through best practices and practical application as it pertains to their business.
Let’s Start a Conversation
Regardless of where you are at in your AP automation journey, DataServ will meet you there and help you evolve.