Preventing bad invoices from posting to your AP or ERP system for processing is among the greatest challenges facing accounts payable. Manually resolving problem invoices consumes too much time, and drives up invoice processing costs. Plus the processing delays can prevent the capture of early payment discounts, an important metric for AP performance.

 

So how can you catch more errors and exceptions up front in the process, and drive up touchless processing rates?

 

Applying business rules at the front end of the process for invoice validation/matching is key; it's what we refer to at Ariba as smart invoicing. But today many solutions claim to validate invoices before posting for payment; so you must understand the true capabilities of the solution you choose. 

 

Here are two questions that you should ask when looking to automate your invoice process to prevent errors and exceptions.

 

What is the process for invoice validation? Simply detecting an empty invoice field or a wrong data format on an invoice will prevent some errors, but will allow many others through. You want a solution that can provide a table of PO detail validation of any sort for PO invoices; and, for non-PO invoices, the ability to mandate requester names with email addresses together with electronic workflow for quickly routing these invoices for cost coding and approval.

 

What percentage of invoice matching and validation will occur in the AP or ERP system? Simple validation like header PO validation for valid and open POs or a defined field value will make your back end systems work overtime to handle the real matching and validation. And this will require AP, procurement and supplier involvement and time to correct.

 

What are your straight-through invoice processing rates, and what steps are you taking to driving them higher? I'd welcome your comments on this important topic for AP professionals.