Digitize Your Accounts Payable: Part 2—Workflows
Is your business ready for paperless pay?
Digital accounts payable processes and online options such as ACH payments and eChecks offer greater efficiency, security, and standardization—key elements for a competitive edge. Yet with some companies, there is a gap between wanting and doing.
Companies still reliant on paper checks ask questions such as:
- Will I lose control over AP if my business moves to digital payments?
- What type of digital payment should I use?
- Are online payments secure?
- Can I handle all of my digital payments through one solution?
These questions map to the exploration phase of digital AP so if you're just starting out be sure to check out the first blog post in this series. But if you're ready for the next step, it's time to talk about workflows.
First things first, what are workflows and why should I have them?
Doubtless, you already have multiple workflows formally or informally established within your organization. Their purpose is to ensure that the appropriate stakeholders are involved in a process in the correct capacity and at the right time. At their loosest, workflows consist of a working, general knowledge around who participates in a process. At their tightest, they are ingrained, established, mapped, and reinforced within an organization.
Take this example: A bill arrives from the company that supplies the plastics for your product. It should be reviewed by Hugh in manufacturing to confirm the amount and delivery and Maisy in accounts payable. It also needs to be examined by an executive since the amount is over $1,000. The workflow to review and approve that invoice would start with Hugh then move to Maisy then, finally, the executive.
The challenge with workflows is that they are hard to enforce and track when handled manually (like walking an invoice to each reviewer). What if Hugh is on vacation and Maisy reviews the invoice and sends it on? Or what if it languishes on Hugh’s desk past the due date? What if a new person is introduced into the workflow? Oftentimes, that person could be overlooked until the workflow change is fully adopted by those already in it. Another critical step in the workflow is documentation and organization. Five months from now, during an audit or a routine inquiry, can you quickly gather all the information and approvals that were attached to that invoice review? When you’re paper-based, that can represent a significant challenge.
When it comes to AP workflows it’s imperative to ensure separation of duties. With a manual process, there are more opportunities to bypass the separation of duties—and more opportunities for your company to become a victim of fraud.
How online bill payment technology supports AP workflows
Now, imagine if you took that manual AP workflow and moved it online. You’ll accomplish the same goals, but in a more effective manner. Enter, an online bill payment solution. An automated solution takes your workflows and automatically enforces them.
Let's get back to plastics. In the above example, a bill hits the system and is evaluated by the solution against the company’s guidelines and workflows. Then:
- It determines that the first person to receive the bill is Hugh. Hugh reviews it, deems it accurate and then hits approved.
- Maisy in AP then gets a notice that there’s an invoice for her to review. She has a question, but with a few clicks can navigate to the original contract to double check. However, she is distracted and forgets to hit approve. The system automatically sends her a reminder. She then hits approve and it moves to the executive.
- The executive is in an airport on his way to visit a client. Luckily, he gets an alert on his smartphone, opens the app, reviews the invoice and approves it for payment.
- Finally, the digital payment is sent to the vendor well ahead of the due date.
No one gets left out of the workflow and the system ensures that the workflow is followed in its entirety. Best of all, all activities around that workflow are automatically tracked and audit-ready. Your workflow is intact and appropriately enforced.
The system also allows administrators to quickly add and delete participants from workflows, which gives your business the dexterity to evolve as it grows. If someone isn’t approved to review a bill, they won’t be able to access it. And if someone who isn’t authorized tries to get into your bank account, they won’t be able to.
It’s time to try automated workflows from an online bill payment solution. Learn more about how Bill.com can help today.