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I would be interested in the responses to this question too.
Here in the UK I have seen a number of successful projects where there is no $ (or £) limit controlling the auto-pay. Instead the focus has been on establishing a robust process for seeking spend approval pre-purchase, and then following-up with appropriate 3-way matching. This seems to give people the comfort to allow any invoices, regardless of value, to auto-pay as long as they match to a previously approved purchase order or contract and there is evidence of receipt. This approach then frees up time to focus on addressing those invoices which do not match first time, or where there is no pre-approved order.
Equally I have seen organisations start-out with quite a low threshold and then gradually increase it over time as their level of comfort around the order approval and invoice reconciliation process grows.
Another common feature of the projects I have worked on seems to be selectiveness over what types of invoices can auto-pay, again instead of a focus on the value of the invoice. For example, all Capex invoices might require separate review. Or invoices relating to a particular project or cost centre, for instance.
Mark, thank you for your response. The methodology you described seems logical and I would be interested in hearing about specific examples, categories, industries, and the like from you or anyone else who is active or interested in this subject.
We haven't implemented auto approval and I have problems around that concept for financial controls but we have implemented auto paying in several different ways.
Standard process is for a three-way match. Assuming that the PO line and Invoice Line match, and if the PO line has been received, the invoice is reconciled without approval and paid. You ordered it, and you got it, so what value do you have approving the invoice? We also have small tolerances for the invoice to exceed the PO and/or receipt. We had Ariba create some custom exceptions that I see will be standard in 10s2.
We also have some commodities as auto receive on Invoice, so the only approval needed is for the PO.
And lastly, we have office supplies and Business Cards set up as no approval needed, so in effect, no approvals are requires at all for payment.
Each of these scenario's undergo a review for the cost/risk of the transaction. Basically, if you could replace the PO with a P-Card, why are there additional controls and attendant costs?