With all the power and configurability of Ariba Invoice Automation you may ask what is the best way to roll this out so you can also experience 98% touch-less, NO Touch, Auto Posting of invoices into your ERP. The good news is that Ariba has learned extensively from our leading customers and has a practice dedicated to just this domain area in order to provide the highest levels of guidance and best practices to our customers. Leaders across all industries have worked closely with Ariba to continue to mature what works and what does not work from a roll out and Smart Invoice rule configuration perspective. It is important to note this is a fluid practice but we believe that our experience and focus on this detailed area sets us apart and further gives us confidence in getting new customers to follow in the wake of the leaders that came before.
A good example in this regard is with a large Fortune 50 organization that prior to Ariba managed most of their invoices in a traditional paper based model. As a result, the percentage of invoices that were able to be entered and posted into their ERP on the first try was less than 40% (i.e. auto post rate). As a result, they embarked on an Ariba project to capture and validate invoices through the Invoice Automation Solution to increase this percentage and maximize AP Cost Savings. Once live with Invoice Automation, they immediately jumped to an Auto Post Rate of 80%. Within 6-7 months thereafter they leveraged Ariba’s Smart Invoice Validation configuration wizard (and Ariba’s Best Practice Service) to refine and tighten these rules, for certain populations of suppliers, and saw Auto Post Rates jump to 98%. This level of program maturity and refinement is a key principal and practice with the Smart Validation capabilities.
Best Practice Tip #2 –INVOICE MANAGEMENT
- PO, NON PO, SERVICES and MATERIAL Invoice Templates (EDI, XML, CSV, HTML, etc): The first order of business in determining what types of invoices are going to be enabled in the first phases (see title to this bullet). Once that is determined and the field level templates are confirmed and designed for each type in scope, then comes the SMART Validation rule configuration that assures the invoice formats are complied with during the invoice submission process by your suppliers. Taking under consideration the GROUP characteristics outlined above, Ariba advises and assists in the configuration of the SMART Validation rules in order to assure the highest levels of AUTO POSTING / NO TOUCH AP INVOICING. Looking at the extensive list of SMART Validation rules outlined above, this can be a daunting task, one that Ariba takes full responsibility in advising and configuring so you mature and meet your requirements in a timeline that is realistic from a change management perspective for both you and your suppliers. Examples of this include a ‘self service’ tightening of price, qty, subtotal amount variances over time in order to ‘ring out’ these types of exceptions over time as the eInvoice practices mature for both you and your suppliers.
- Paper Conversion Scope: The management of the ‘paper’ suppliers needs to be treated differently due to the nature of sending and converting paper to electronic. Although all these invoices come into Ariba and look the same to you, the Smart Validation Rules must be different as the supplier does not know about your eInvoice Network/Portal (i.e. auto post rates will be a bit lower – a fact of life with paper suppliers). With that said, Ariba brings the experience and best practices for these types of suppliers in order to drive higher auto post rates and also put together the proper ‘transition’ plan to ‘self service’ on the Network Portal in later phases (i.e. organic transition through status and pay schedule visibility and targeted communication following initial paper invoice submission to transition next time they send an invoice).
- Tax and Shipping Requirements: Often one of the larger pains for AP organizations and an area that Ariba has proven to excel through Smart Validations and auto rejection and corrections of invoices that do not capture the proper Tax and Shipping information, categories and assignments at the line item level. Configuring these rules and adjusting them based on regional and supplier GROUP characteristic is a best practice Ariba brings to the table and further helps you get to the highest levels of auto posting even for tax validation reasons!