4 Things that will help you know if your current process is ready for #APAutomation

I consider myself a person that does a lot of preparing. To give you an example my family and I moved about 8 months ago and I had a detailed project plan with an attached Spreadsheet that nobody but me paid attention to. In the end we moved but I think the rest of the family would have been better off if we would have fallen the plan.

The Key

I think the key to good planning is preparation. The better prepared you are the better the plan. Being prepared is one of the reasons I wrote The 8 Pitfalls of Accounts Payable Automation. Generally an automation journey starts with an internet search. The search present 3 or 4 service providers with great websites, which starts you on a path that leads to demos, analysis, more demos, and no clear decision. In The 8 Pitfalls I recommend that you do some internal soul search before you every pick up a clicker and start an internet search.

4 Things

Thing 1 to help you know that your current process is ready for AP Automation is to ask yourself and team, and then ultimately analyze the last time your Accounts Payable process was updated. It is a very good practice whether you automate or not to review your process to make sure it is current. If you answer this questions between 3 years and never then you aren’t ready to automate.

Thing 2 to help you know that your current process is ready for AP Automation is to create a process map of all invoice activities. Some of you are lucky (you probably didn’t think about that when you were putting it together) you were mandated to map the process. Larger or public companies are required to create written approval rules… that’s a process map. For those of you that don’t have this mandated, you will need to write down each step of each process to have a full view of where invoices are going, who is approving and what the exception process is during the approval process.

Thing 3 to help you know that your current process is ready for AP Automation is to establish a cost for the process. Regardless of how many invoices and the dollar amount on those invoices. your process cost your organization a certain amount of money. Traditionally I refer to this as cost per invoice (CPI). One of the key indicators that proves the impact of automation is cost reduction. If you don’t know your current cost you won’t know if it can be reduced.

Thing 4 to help you know that your current process is ready for AP Automation is after you have done your research, cost and map to take a very critical look at every process and ask each step what its purpose. I have a belief that is walk a step in a process back to it origin you will find out why it was created and who it servers. If that purpose doesn’t match with what you need to accomplish then you have to put a big red “X” on that step.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people that startedAvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information.

With Workflow Should I Eliminate Steps? #APAutomation

When I think of eliminating steps I always think of George Costanza and the step skipper. Enjoy:

There Is A Thought

When Automating Accounts Payable there is a thought that you need to create as few approval processes (workflows) and steps as possible. This is a good idea because it comes from the notion that automation should be efficient as possible. It’s a good thought, and trying to become as efficient as possible is a great because after all one of the great benefits of automation is efficiency.

Efficiency and Order

When looking at eliminating steps in an approval process, efficiency shouldn’t be the first consideration. The first consideration should be who needs to approve the invoice. I put an emphasis on “approve”. I really hate to write this, but the point behind an approval process is to approve invoices. The word approve, however, is where people struggle. When you automate your AP process before you ever choose a service provider you need to have a very good definition of “approve”. The one I coach people on is that approvals are only those actions that holds some sort of purpose in the invoice getting into the accounting system for payment. Some of these actions are:

      • Sign off that the work has been done
      • The goods have been delivered
      • Check against budget
      • PO match if not automated
      • Conditional situations (job cost, capitalized expenses…)
      • Coding assignment or validation

Paper Dysfunction

You may think that I have just given you some obvious advice, but when automating AP you need to take out those things that are associated to “Paper Dysfunction”. Paper dysfunction are those steps that are created because of paper. Paper unlike automation needs additional steps for controls, checks and balances. Other steps that are somewhat dysfunctional are people inserting themselves in the process to either get or see certain information on the invoice. I would see this a lot with utility invoices that needed consumption data analyzed.

Good News

With Accounts Payable Automation, your software will be your controls, checks and balances, that’s one of the great benefits of automation. Also, the person who needs to see or gather the information, can get a report of that information or the invoice, therefore there is no need for them to be in the approval process. The rule should be, only approves are in the approval process, everyone else is accommodated by a report.

Skipping Steps?

Don’t be a step skipper like George said, but eliminate the steps that are needed for paper because you don’t need them for automation.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people who started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information

4 Things that will help you know if your current process is ready for AP Automation

I consider myself a person that does a lot of preparing. To give you an example my family and I moved about 8 months ago and I had a detailed project plan with an attached Spreadsheet that nobody but me paid attention to. In the end we moved but I think the rest of the family would have been better off if we would have fallen the plan.

The Key

I think the key to good planning is preparation. The better prepared you are the better the plan. Being prepared is one of the reasons I wrote The 8 Pitfalls of Accounts Payable Automation. Generally an automation journey starts with an internet search. The search present 3 or 4 service providers with great websites, which starts you on a path that leads to demos, analysis, more demos, and no clear decision. In The 8 Pitfalls I recommend that you do some internal soul search before you every pick up a clicker and start an internet search.

4 Things

Thing 1 to help you know that your current process is ready for AP Automation is to ask yourself and team, and then ultimately analyze the last time your Accounts Payable process was updated. It is a very good practice whether you automate or not to review your process to make sure it is current. If you answer this questions between 3 years and never then you aren’t ready to automate.

Thing 2 to help you know that your current process is ready for AP Automation is to create a process map of all invoice activities. Some of you are lucky (you probably didn’t think about that when you were putting it together) you were mandated to map the process. Larger or public companies are required to create written approval rules… that’s a process map. For those of you that don’t have this mandated, you will need to write down each step of each process to have a full view of where invoices are going, who is approving and what the exception process is during the approval process.

Thing 3 to help you know that your current process is ready for AP Automation is to establish a cost for the process. Regardless of how many invoices and the dollar amount on those invoices. your process cost your organization a certain amount of money. Traditionally I refer to this as cost per invoice (CPI). One of the key indicators that proves the impact of automation is cost reduction. If you don’t know your current cost you won’t know if it can be reduced.

Thing 4 to help you know that your current process is ready for AP Automation is after you have done your research, cost and map to take a very critical look at every process and ask each step what its purpose. I have a belief that is walk a step in a process back to it origin you will find out why it was created and who it servers. If that purpose doesn’t match with what you need to accomplish then you have to put a big red “X” on that step.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

Process Improvement 101 = Everything a Beginner Should Know #APAutomation

There is nothing wrong with being a beginner. There is something wrong with being a beginner and not wanting to tell anyone, and acting like you are a master. Even worst, if you think you are a master and tell everyone you are and try to boss people around, when really you are a beginner… Oh sorry about that, a little corporate america frustration showing.

In The Beginning

In the beginning there was an original process (I bet you thought I was going to say light – but that too is a process). The funny thing about an original process is most people don’t know where it came from and why (technically) it was created. I have counseled people on, if they know who created the process you can find out why it was created. There are six things a beginner should know about process improvement.

1. Focus on impact – One of the true signs of a beginner is spend too much time on the execution of the process change (like software installation) rather than the big picture… Why!

2. Make sure it service people – Save yourself from just buying and installing the latest and greatest by making sure your process improvement ultimately helps your people.

3. All should have input, but only a few should have decisions – Keep the decision group as small as you can, but more than one, because you never know where a good idea will come from.

4. Not everything is an improvement – Change for change sake is a terrible things. I see this with people who are new to a company and wanting to make a big and immediate impact. There is nothing wrong with that , but take a warning from point number one and find the why.

5. Experience goes a long way – I know this much seem like a strange bit of advice because it’s for beginners but with process improvement you can draw experience from other aspect of the business.

6. Don’t fear the change – Ultimately process improvement is change. Most people don’t like change until they know what it is for and why it is happening.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

How about a children’s book? The Princess and the Paper – click here to buy

4 Things that will help you know if your current process is ready for AP Automation

I consider myself a person that does a lot of preparing. To give you an example my family and I moved about 8 months ago and I had a detailed project plan with an attached Spreadsheet that nobody but me paid attention to. In the end we moved but I think the rest of the family would have been better off if we would have fallen the plan.

The Key

I think the key to good planning is preparation. The better prepared you are the better the plan. Being prepared is one of the reasons I wrote The 8 Pitfalls of Accounts Payable Automation. Generally an automation journey starts with an internet search. The search present 3 or 4 service providers with great websites, which starts you on a path that leads to demos, analysis, more demos, and no clear decision. In The 8 Pitfalls I recommend that you do some internal soul search before you every pick up a clicker and start an internet search.

4 Things

Thing 1 to help you know that your current process is ready for AP Automation is to ask yourself and team, and then ultimately analyze the last time your Accounts Payable process was updated. It is a very good practice whether you automate or not to review your process to make sure it is current. If you answer this questions between 3 years and never then you aren’t ready to automate.

Thing 2 to help you know that your current process is ready for AP Automation is to create a process map of all invoice activities. Some of you are lucky (you probably didn’t think about that when you were putting it together) you were mandated to map the process. Larger or public companies are required to create written approval rules… that’s a process map. For those of you that don’t have this mandated, you will need to write down each step of each process to have a full view of where invoices are going, who is approving and what the exception process is during the approval process.

Thing 3 to help you know that your current process is ready for AP Automation is to establish a cost for the process. Regardless of how many invoices and the dollar amount on those invoices. your process cost your organization a certain amount of money. Traditionally I refer to this as cost per invoice (CPI). One of the key indicators that proves the impact of automation is cost reduction. If you don’t know your current cost you won’t know if it can be reduced.

Thing 4 to help you know that your current process is ready for AP Automation is after you have done your research, cost and map to take a very critical look at every process and ask each step what its purpose. I have a belief that is walk a step in a process back to it origin you will find out why it was created and who it servers. If that purpose doesn’t match with what you need to accomplish then you have to put a big red “X” on that step.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

With Workflow Should I Eliminate Steps? #APAutomation

When I think of eliminating steps I always think of George Costanza and the step skipper. Enjoy:

There Is A Thought

When Automating Accounts Payable there is a thought that you need to create as few approval processes (workflows) and steps as possible. This is a good idea because it comes from the notion that automation should be efficient as possible. It’s a good thought, and trying to become as efficient as possible is a great because after all one of the great benefits of automation is efficiency.

Efficiency and Order

When looking at eliminating steps in an approval process, efficiency shouldn’t be the first consideration. The first consideration should be who needs to approve the invoice. I put an emphasis on “approve”. I really hate to write this, but the point behind an approval process is to approve invoices. The word approve, however, is where people struggle. When you automate your AP process before you ever choose a service provider you need to have a very good definition of “approve”. The one I coach people on is that approvals are only those actions that holds some sort of purpose in the invoice getting into the accounting system for payment. Some of these actions are:

      • Sign off that the work has been done
      • The goods have been delivered
      • Check against budget
      • PO match if not automated
      • Conditional situations (job cost, capitalized expenses…)
      • Coding assignment or validation

Paper Dysfunction

You may think that I have just given you some obvious advice, but when automating AP you need to take out those things that are associated to “Paper Dysfunction”. Paper dysfunction are those steps that are created because of paper. Paper unlike automation needs additional steps for controls, checks and balances. Other steps that are somewhat dysfunctional are people inserting themselves in the process to either get or see certain information on the invoice. I would see this a lot with utility invoices that needed consumption data analyzed.

Good News

With Accounts Payable Automation, your software will be your controls, checks and balances, that’s one of the great benefits of automation. Also, the person who needs to see or gather the information, can get a report of that information or the invoice, therefore there is no need for them to be in the approval process. The rule should be, only approves are in the approval process, everyone else is accommodated by a report.

Skipping Steps?

Don’t be a step skipper like George said, but eliminate the steps that are needed for paper because you don’t need them for automation.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

4 Things that will help you know if your current process is ready for AP Automation

I consider myself a person that does a lot of preparing. To give you an example my family and I moved about 8 months ago and I had a detailed project plan with an attached Spreadsheet that nobody but me paid attention to. In the end we moved but I think the rest of the family would have been better off if we would have fallen the plan.

The Key

I think the key to good planning is preparation. The better prepared you are the better the plan. Being prepared is one of the reasons I wrote The 8 Pitfalls of Accounts Payable Automation. Generally an automation journey starts with an internet search. The search present 3 or 4 service providers with great websites, which starts you on a path that leads to demos, analysis, more demos, and no clear decision. In The 8 Pitfalls I recommend that you do some internal soul search before you every pick up a clicker and start an internet search.

4 Things

Thing 1 to help you know that your current process is ready for AP Automation is to ask yourself and team, and then ultimately analyze the last time your Accounts Payable process was updated. It is a very good practice whether you automate or not to review your process to make sure it is current. If you answer this questions between 3 years and never then you aren’t ready to automate.

Thing 2 to help you know that your current process is ready for AP Automation is to create a process map of all invoice activities. Some of you are lucky (you probably didn’t think about that when you were putting it together) you were mandated to map the process. Larger or public companies are required to create written approval rules… that’s a process map. For those of you that don’t have this mandated, you will need to write down each step of each process to have a full view of where invoices are going, who is approving and what the exception process is during the approval process.

Thing 3 to help you know that your current process is ready for AP Automation is to establish a cost for the process. Regardless of how many invoices and the dollar amount on those invoices. your process cost your organization a certain amount of money. Traditionally I refer to this as cost per invoice (CPI). One of the key indicators that proves the impact of automation is cost reduction. If you don’t know your current cost you won’t know if it can be reduced.

Thing 4 to help you know that your current process is ready for AP Automation is after you have done your research, cost and map to take a very critical look at every process and ask each step what its purpose. I have a belief that is walk a step in a process back to it origin you will find out why it was created and who it servers. If that purpose doesn’t match with what you need to accomplish then you have to put a big red “X” on that step.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

There is process and then there is good process – 3 ways you know you’re good

In my book The Argument to Automate I write about processes being bad, and how when processes are bad everyone seems to know. The problem with processes is when they are mediocre. Processes that are so-so don’t normally get the attention of bad processes.

Sound The Alarm

As I wrote in my introduction when processes are bad everyone seem to know it. With Accounts Payable when your process is bad you lose invoices, invoices a paid slowly and you get late fees. You can also tell that your process is bad when people are working overtime and people don’t know where invoices should go to be approved, or the steps that need to be satisfied before the invoice is entered into the accounting system.

Mediocre

The problem with mediocrity is people can become comfortable with it. It is almost like things not being “so” bad they can be lived with. Mediocrity will lull your company’s leadership to sleep and it is very difficult to wake them up. What happens is once they are asleep or used to the process other competing processes or events or projects will take priority.

3 Things

If you are good then your process will tell you. There are three things to look for to know your Accounts Payable process is good.

        1. Cycle Time – this is the amount of time that it takes you to approve invoices. From the moment your invoices are received (that takes out the Post Office for the equation) to the time the invoices are entered into the accounting system to be paid. The important part of this measurement will show you how efficient your approval process is. Appropriate paper levels of this process are 15 days and under. The clients I work with however that are automated average 3 days.
        2. DPO – Days Payables Outstanding. At first this metrics seem the same as cycle time, but what DPO measures is the average day it takes to pay a supplier. Meaning the entire process which start from the time the time the invoice is mailed or sent electronically by the vendor until the time the check or electronic payment is cleared through your bank. This number is normally calculated on a quarterly or annual basis. The number to strive for is 25 – 30. You don’t want the number to be to low because you want to keep your money as long as possible and you don’t want your number to be too big because it means you are paying a lot of suppliers late.
        3. Cycle Time and DPO – All together now, the difference of these two numbers creates a pretty interesting story of good process. Using the best case scenario I have ever been a part of, the cycle time is 3 days and the DPO is 30 the difference (I should make up a name for this… let’s call it – Payables Productivity Rate – PPR) or the PPR is 27. 27 is an excellent PPR. If the number is above 20 or below 30 you are able to “aggressively” capture discounts and “proactively” manage your check runs or payments. This is a wonderful place for an accounting professional to be.

Conclusion

I bet, for those of you that read my articles consistently, you know where I am going with this… AP Automation will greatly improve your numbers and give you much better visibility to what invoices and payments are doing as well as give you number like cycle time and PDO to know if your processes are excellent or just plain ok.

Want to know more? Buy My Books!

The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

The 8 Pitfalls of Accounts Payable Automation – click here to buy

7 Simple But Critical Tips for Creating Better Approval Processes

The older I get and the more intrenched in business the better I love process. That’s right… I just wrote that… I LOVE PROCESS. Please no one tell my kids about this one… I won’t hear the end of it.

Process Vs. Process

I am sure you are aware of this fact. There are good processes and there are bad processes. As someone who has designed processes for a long time now, I have been the author of both (good and bad). For some reason the bad processes stick in my mind more. Whether good or bad, processes are important especially when it comes to the approvals of invoices in Accounts Payable.

7 Tips

When it comes to automated approval process there are seven things that will create better process that you should keep in mind.

  1. Start from scratch: When automating AP make sure you start with a blank slate, especially when it comes to the approval process. Paper approval processes have paper dysfunction that won’t translate to an automated process.
  2. Keep on recording: When creating or improving a good thing to remember is in an automated world is you are capturing more data. Use that data police and improve your automated process.
  3. Only approvers: This tip is to make sure that only people making decisions are in your approval process. Everyone else should stay out to make sure you don’t needlessly slow down the process.
  4. Don’t forget your manual: There are some of you (that are lucky) that your approval process is ruled my corporate policy… use it, you are fortunate, however refer to tip one to make sure you are not just duplicating your paper process.
  5. Give it another look: Creating a better approval process is an attitude (not that kind). The attitude is that the betterment of the process is a journey not a one time trip.
  6. What scalable? I wrote an entire bonus chapter on scalability in The 8 Pitfalls… can you believe that? Well if you don’t… here is the chapter… read it for yourself: Scalability
  7. Remember who it serves: Congrats on making it this far, and your reward is the most valuable tip to creating a better approval process. I have found, when analyzing processes that to ultimately find out the true nature of the process you should walk that process back to its original creation and ask the question, “who does this process serve”. When you answer that question, you will know why the process was created and therefore its ultimate nature. It’s upon knowing that nature that you can determine it’s worth.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy