Workflow and Process Automation Series Part 2: Invoice Processing

August 31st, 2016 | Posted by Alexa Magdalenski in Guest Blogs | Member Blog Posts

This week on NVTC’s blog, Marty Herbert of NeoSystems Corp. shares the second in a series of tips for workflow and process automation.

In Part 1 of our Workflow and Process Automation Series, Re-evaluating Your Processes, we looked at a few steps your organization can take towards drastically simplifying your billing process. Keep in mind that throughout this series, I will highlight solutions which produce time saving, compliance-driven processes that integrate with business systems, like Deltek Costpoint, NetSuite, SAP or others and create an enhanced workflow automation framework. In today’s post, Part 2 of our series, we’ll address vendor invoice processing.

A few years back, while working on a series of consulting projects, I looked at a client’s AP department while performing an audit and noted several variations they employed to process their vendor invoices. Some invoices came in via email, others via snail mail. Some came in to the attention of the company’s AP department; others came in via the project manager. Some were based on a PO and others were one-off ‘bills that needed to be paid.’ Knowing who the appropriate approver is could be multi-faceted and involve the receipt of goods (or services). Similar to many larger government contractors, our client used Deltek Costpoint for vendor invoice processing so I will use that system as an example of a well-known business system that is largely identifiable for our audience.

This business system has a great mechanism for capturing data and information related to accounts payable, but it can’t necessarily control how invoices are delivered, who approves them, and how that approval is captured for compliance purposes.

Our client’s overarching goal (outside of employing processes that increased efficiency and effectiveness) was to find a way to electronically interface an APPROVED invoice for vouchering in Costpoint. That sounds like a simple objective, but there are nuances that might not be immediately obvious. The “approved” aspect implies that there needs to be a process followed to obtain a valid, recognized approval. The “electronic” aspect implies that the entry into the ERP system should be automated without the need for manual data entry. Automated work flow tools make the design and controlled execution of a process possible, while Costpoint Web Services enables an electronic interface.

But, let’s slow down. Before we send data along, we have to gather the data. In this case the data comes from a vendor’s invoice, but we want to make sure the vendor’s invoice has been reviewed and approved before we send it into the system of record. The first step in automating this process is to gather the data input (the invoices). There are multiple ways we could approach this:

  • We can give vendors access to a “portal” whereby they upload the invoice directly into a workflow, or vendors can email the invoice to a specific address that will automate process kick-off and move it into a queue for AP servicing, or
  • We can receive a vendor invoice and initiate the process by loading it to the AP queue (potentially after scanning it in if it is received hard copy).

Then it is time to route the invoice to the proper ‘approver.” If companies are already connected to an ERP application that supports project management data, they are able to use the data inherent to any given project to pull the relevant approvers for PO-based invoices. AP clerks will then have matched the invoice to a PO (unless the vendor did that already) and chosen the lines from the PO to which the invoice applies then… well, that is all they have had to do so far.

Off to the approver(s) the invoice goes. The approver gets the invoice that has been submitted as well as details added by the AP department. The approver can decide to reject it or send it to another approver, or sit on it a while. Any (or all) of these tasks can be built into the process. The end result is (hopefully) an approved invoice.

At this point, the system should validate the invoice information and manage the voucher process through creation, voucher number generation, accept or reject status and check generation. It is critical and most efficient to have a complete trail of activity from submission to payment.

This process, when automated, is extremely easy to follow, saves time and money and is easier to implement than one might think. Unfortunately, most government contractors don’t know the ease with which automation software can achieve this and many other processes quickly and effectively.

There are numerous effective workflow management software systems in the market today. Integrify, a workflow management software used to automate a myriad of processes within a variety of platforms, is one tool we use at NeoSystems to automate vendor invoice processing within the business systems we use.

Our next blog will focus on the delightful automation of purchase requisition. If you have any burning questions about this or other processes (even those we haven’t gotten to yet!) using web services and workflow management software for your business system, please feel free to contact me.

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