Helping clients create a highly efficient AP approval workflow: Part 1 - Asking the right questions

When clients adhere to a manually driven AP approval process, it can wreak havoc across the entire finance function. The proof is in the outcomes—clients who perpetually pay late fees, have missing AP documentation, or consistently have to manage exceptions.

The cost of paying the bills involves far more than just writing a check. A client’s AP process encompasses everything from document management, manual data entry, approval, payment, reconciliation and more. And when this process is mired down with paper-heavy, manual tasks, it all but eliminates any ability to improve cost savings and elevate efficiency.

If you have clients (and you likely do) who are feeling the pain of an inefficient accounts payable approval workflow, helping them automate and streamline this process can be a gamechanger for their bottom line. And an advanced AP solution can get them there—helping to bolster workflow efficiency, reduce money out (think late fees, postage and paper), and free up time that the client can use to focus on running their business.

To get there, you’ll want to start by asking clients the right set of questions. The purpose? To uncover common pain points and identify elements of their existing workflow—the good and the bad. From there, it’s much easier to help clients refine or completely rebuild workflow to operate within an efficient, highly productive AP approval process.

Identify pain points by asking the right questions

When you start asking clients the right questions about their process, you can get to the heart of their issues much quicker … and then on to the resolution.

Uncovering the client’s pain right out of the gate will help you identify core challenges, while also pushing them to confront unnecessary costs. This is often a game-changing eye-opener for clients.

It’s likely that many clients will share similar pain points, such as:

• Bottlenecks in the approval process that lead to costly, perpetual late fees.
• Repetitive data entry that increases the risk of human error and exceptions.
• Misuse of staff skills—expertise that could be applied to other business areas.
• No separation of duties, which can result in fraudulent payments.
• Increased risk of fraud broadly via the use of paper checks, lack of a defined AP workflow, sharing bank account login credentials, and ignoring fraud prevention tools.
• Poor document management and/or a lack of process clarity.

Any or all of these responses help you better understand your clients issues and needs. With this information in hand, you can help them identify areas of weakness and guide clients in creating an automated, streamlined AP approval process.

Who supports your bill pay process?

This question helps determine if clients have the right people involved … or too many … or too few. Employees are a precious commodity, so utilizing their talents appropriately is key to business success. When team members are mired down with time-draining manual tasks, it not only hurts the business but hinders them from taking on more value-driven work and applying their unique expertise elsewhere.

In answering this question, you should help clients map out exactly who is involved in the bill pay process and at what steps, who is necessary to the process, and who can be moved to support other areas of the business.

This question will also shine a spotlight on whether the client is lacking in the area of separation of duties. For AP approval, it’s critical to separate duties in order to mitigate the risk of fraud, theft, and security breaches, as well as reduce human error. Lead the conversation down the path of common roles that support a uniform bill pay process and the value of separating duties at each stage of the workflow.

Do you have policies for multi-tier approval?

For most clients, paying larger amounts requires a bit more scrutiny in the approval process. When moving larger amounts of company money, it’s important to require multiple levels of sign-off to reduce overall risk. But that’s not the only control a client might require in their approval workflow.

Clients with multiple locations and/or departments require more controls within the approval process. Close examination of existing workflows often uncovers gaps, such as excluding relevant stakeholders and lack of control over cash flow.

This question often reveals that clients are adhering to a manual, spreadsheet-driven process for complex approval routing. This opens the door to discussing the value of advanced technology to automate multiplex routing, facilitate real-time collaboration, and augment controls.

BILL offers built-in built-in dynamic approval policies that can be created for multiple categories.

How are vendors managed?

To help prevent late fees and maintain healthy relationships, efficient vendor management is a necessity. Many clients may not even realize their deeper issues with vendors until you bring them to light via a focused conversation.

Asking this question will help pinpoint cracks in vendor processes such as incomplete or outdated vendor records. Not having current data such as contract and payment terms, electronic payment authorization, tax information, and industry-specific criteria can quickly lead to trouble (like painful late fees and strained relationships).

Consistent late payments and breaching of terms can create tension in the vendor-client relationship. This can lead to strict contractual agreements, possible loss of vendors, and even damage to the client’s reputation.

Asking this question opens the door to an in-depth discussion around the value of an automated bill pay workflow—one where vendor information is stored and accessible in a single, organized space. It may also help clients realize that it’s time to eliminate the outdated spreadsheet model.

How are payments disbursed?

Without an all-in-one bill pay solution, many clients will likely reveal a staggering lack of organization where payments are concerned.

Consider that clients disburse payments to multiple vendors in a variety of ways, including paper checks, bank wire, credit cards, and other forms. Proper processing and recording of transactions require some serious organization to maintain accurate records. Also required is a keen eye to mitigate fraud.

Once this pain point is revealed, it makes for easy conversation around the benefits of automated bill pay. Value props to cover with clients include elevated efficiency, cost savings (no more paper checks, postage, canceled check fees), access to multiple payment types within a single dashboard, and peace of mind that accounts are reconciled more accurately.

Is your client exposed to fraud in the payables process?

Many small business clients aren't aware of processes and workflows available to help mitigate risk as they pay bills and spend money. Here's a quick ‘Red Flag’ checklist to help you determine if their AP process could be putting their business financials at risk:

🚩 Paper Checks — Paper checks contain all the information fraudsters need to steal a client’s money. Paper limits transparency, can be easily manipulated, can be stolen or destroyed, and often slows down critical processes.

🚩 No defined AP workflows — Paper isn’t the only place fraud happens. Business email compromise (BEC) attacks use email systems to impersonate someone from within. If a clearly defined workflow with user roles isn’t established and followed, the business leaves themselves open to BEC attacks.

🚩 Sharing banking account login information — People come and go. When clients share confidential information such as banking logins, every person who has it carries a risk and requires a change if a person leaves the business.

🚩 Ignoring fraud prevention tools — Mitigating risk isn’t a manual process; something is bound to be left behind. Clients should be aware of the tools that can help.

Stay tuned for more …

Starting the conversation with clients is just the first step to transitioning them to an efficient and automated AP approval workflow. Not only can asking the right questions help inform clients of workflow areas in need of improvement (and the long list of benefits), but the intelligence gathered will prove invaluable as you move forward. In fact, it will set you up with all the vital data required to start down the path of tracking KPIs and setting goals with clients.

Be sure to come back for part two of this three-part series, where we detail how to use aggregate client information to identify KPIs and demonstrate the immense value to your clients.

Access the complete guide, Accounts Payable Approval Workflows - Best Practices, for detailed insights, tips, and tactics on helping clients move to a structured and automated AP process.