I could really start this article on a deep philosophical note by writing about “What is Time – What is real – Are we all really here man”. Just like college, but I don’t want to do that. After almost 30 years in corporate America I don’t think I can anymore.
For those of you that are new readers, or for those of you that have become very serious about Account Payable Automation in the new year, I want to give you a definition of automation that not only will tell you what AP Automation is but it tells you what AP Automation does, which is important when evaluating automation as well as explaining automation to your colleagues.
Accounts Payable Automation is only as good as the time, people and effort it free up.
This is not a very good text-book definition. In fact when I wrote The 8 Pitfalls I wanted to help define AP Automation, but I moved to the above definition because I wanted to give people it’s true outcome… Time
Knowing Where To Look
If you buy into (I hope you do… it will make your life so much easier) time being the primary reason to automate AP, you will need to know where to look for that time. Here are 4 places (note: these areas will depend greatly on your service provider’s capabilities, however I am hoping to give you a good sense of how to look)
- Manual Tasks – When evaluating Accounts Payable Automation, look for the tasks to eliminate that are manual in nature. Tasks such as opening mail, data entering information into the accounting system, stuffing checks in envelopes and filing. All of these are examples of tasks (sorry folks) that don’t take any skill. Therefore they are consider manual. They are also tasks that you don’t want your skilled people doing. If you work in a mid-size company these are generally tasks that take up your valuable skilled employees time, so it’s a great place to look for time.
- Transition Tasks – Another good place to find time is when invoices (checks and other documents) are in transition. When I first started automating, in 2000, for the first six years of my automation career all I had to do (not all but most) was to explain and demonstrate the use of automated workflow. Then (notice I didn’t write “back then” it wasn’t so long ago) workflow, especially to the middle market, was magical. Workflow now isn’t as magical but it still serves a wonderful purposeful to free up time around moving invoices (checks or documents) from one place to another. In the paper world there can be a lot of time spent packaging, mailing, receiving, opening and sorting these packages. There is also time to be found when staff is “figuring out” where invoices should go. It doesn’t seem like it would be a lot of time but it adds up.
- Business Tasks – The third place to look for time is around those tasks that, similar to point one, that doesn’t require a lot of “thinking”. I know that must sound terrible, but if there is task that software is able to predict then you can free up that time. Task like coding. I did a study of over 600,000 invoices and their coding values. I found that 75% of those invoices could be pre-coded with a default (I used a combination of two defaults to get results). The 25% that wasn’t coded by a default didn’t mean there was something wrong with it, but those invoices didn’t have a pattern that a coding default was able to pick up.
- 100% Tasks – The first three points in looking for time in AP were actually places. This point is more of an idea that can help you evaluate Accounts Payable Automation… maybe a little bit of advice. When looking at time and evaluating service providers look for task that are eliminated 100%. Those are tasks that the service provider will take completely. You can read more about it in previous articles on in one of the books.
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