Putting Robots on Your Payroll: Utilizing Robotic Automation for Your AP Approval Processes
We live in a world where technology is ever evolving. What was once science fiction is quickly becoming our current reality. Sure, we still don’t have flying cars like in Back to the Future, but other technological advances are becoming part of our daily lives. Take for instance robots. When most of us hear the term robot, we probably have an image similar to those in A.I. Artificial Intelligence or Rosie the Jetson’s household robot. However, our current robots are a bit different than that of fiction. They build our cars on assembly lines, vacuum our floors, and are even present in the code found on our computers. In the world of document management, it is the later type of robots that we deal with on a daily basis, which help to make our lives run more smoothly. Robotic process automation is essentially when you take a repetitive, often a rules-based, process, such as extracting information from the headers and footers of invoices and automate it. This is done by using software known as ‘robots,’ which capture and interpret IT applications, which enables transaction processing, data manipulation, and communication across multiple IT systems. This past spring, Deloitte presented a session on “Robotic Process Automation: The Next Evolution in Finance Operations.” This presentation identified robotic process automation (RBA) as the capturing of existing process steps for the purpose of automating activities, and further defined it as replicating human interventions to mimic common and repeatable tasks. What may sound like an expensive and futuristic idea, is actually something that small and mid-sized companies are currently taking advantage of. I have been a long-time evangelist for process improvement within accounts payable and accounts receivable departments, and found Deloitte’s analysis to be spot on. Today’s software technology allows nearly any size company to automate their processes and reduce their costs. Companies that excel find ways to fully utilize the talents of their employees. Asking an employee to complete mindless and meaningless activities not only denies that employee the ability to grow, but also stifles their ability to add their intellectual knowledge to improving your organization.
By utilizing the proper technology, AP processing becomes far less labor intensive, while also providing controls and analytics that are essential for management. Imagine software that can read and extract information from invoices; workflows that can automatically route documents for approval bases off of information found within the invoice; sharing data between your accounting software and your document management system to eliminate errors and update systems on the fly. These are all things that small and mid-sized businesses are now taking advantage of. The use of “bots” to handle processes previously reserved for humans allows your process to run more smoothly, with far less chance of error. This technology has also has an additional benefit. By its very nature, it creates a system for your payables process. This system if filled with control points that create consistent and reliable processing. Let’s take a look at an all too familiar scenario. A person in a department within your organization orders a product or service. They are not required to use a purchase order so you are unaware of their actions. The invoice is emailed directly to the purchaser who prints it to paper. Time passes and they forget or delay processing the payment. A month passes and you receive a statement for the unpaid invoice. This is the first that you knew of the purchase. Sound familiar? There are so many things wrong with this scenario, but let’s assume that you are not going to change your purchasing policies and employees can continue to order things without a PO. Let’s begin by saving the emailed invoice to a folder on the network, instead of printing it to paper a “bot” (document capture software) looks for new invoices in the folder and automatically processes them. The software reads information from the header of the invoice and compares it with data from your ERP system. The digitized invoice is saved to the document management system using data extracted from the capture process. The workflow is then kicked off and an AP clerk is notified that invoices are available for processing. The AP clerk codes the invoices within the workflow using the chart of accounts from the ERP system. Using a vendor table, also provided by the ERP system, the invoice is automatically routed to the correct department and user. The system notifies the recipient by email that an invoice needs approval. System timers determine if an invoice is not acted upon within a described time period and will notify the AP clerk or manager. Invoice dollar amounts are tracked by the system and depending on the company’s rules will require additional approvals if over a specified threshold. Approved invoices are routed back to the AP department where managers review and provide final approval for payment. The batch of approved invoices is then sent to the ERP system, which is updated with the information required for cutting the checks. In the above description, software automation is responsible for handling the data entry, invoice routing and overseeing of timelines. The AP clerk and other approvers interaction with the process is short and to the point. This frees up these workers to perform more relevant tasks for the company. Should you like additional information on how your organization can benefit from AP automation technology contact The Priton Group at firstname.lastname@example.org or call (608) 279-4088. And as always, if you like what you’ve just read, please share and follow us on social media. Let us know if you have used automated robotic processes to help utilize your AP department in the comments below.