Guide to Best Practices for Modern Accounts Payable

Transcription

1 Guide to Best Practices for Modern Accounts Payable Moving from the Back Office to the Hub of Collaboration and Insight Financial automation software is reshaping the role of today s modern accounting team, transforming the accounting department from the safe for capturing and storing financial data to the hub of corporate collaboration and spending insight. Accounting is emerging from the back office to occupy an entirely different space in organizations one that is without any dividing walls. This guide is designed to assist your organization in selecting the right software solution for a modern accounting department. Support CFOs Decision-Making With the introduction of software solutions designed with analysis dimensions, workflows and web forms, accounting professionals are moving from the back office to proactively engage with operations teams and support CFOs decision-making with real-time data. Built from the ground up to incorporate messaging, electronic data capture, financial processing automation and analytics, emerging Cloud ERP and spend management solutions are eliminating the offline spreadsheets and data rekeying required by more traditional ERP solutions. These best-of-breed software solutions have demonstrated that there s a lot more to modern accounting than just pitching the paper. Contents Why the Cloud?... 2 Automation: Eliminate Manual Data Entry and Speed up Approvals... 3 Ease of Use: Submit, Review and Approve Documents on Any Device... 4 Visibility: Gain Insight into Cash Flow... 5 Advanced Reporting: Analyze Spending, Budgets and Bottlenecks... 6 Deep Intergration: View Data across ERP and Software Systems... 7 Moving Forward with Ariett...8/9 Works Cited...10 Form 010 pg.1

2 Make Accounts Payable a Part of Your Business Strategy According to the research advisory firm Ardent Partners, accounts payable is becoming a more strategic part of organizations because of the opportunity to utilize Cloud software solutions for increased operational efficiency, in-depth reporting and savings from purchase to payment (Bartolini 4-5). At a rapid rate, accounts payable is changing and changing for the better, encouraging accounting to be a key financial advisor to modern business. Why the Cloud? Cloud or SaaS (Software as a Service) solutions have elevated accounting, making the department more sophisticated and savvy than ever before. A 2014 report by industry research firm Aberdeen Group surveyed organizations primary reasons for adopting Cloud technology (Castellina 11): Collaboration across locations (37%) Requiring scalability (29%) Having a global workforce across timezones (29%) By allowing employees in both corporate headquarters and subsidiaries in other locations to access the same financial database, Cloud software facilitates collaboration among accounting, other employees and organizational leadership to ensure seamless and swift financial processing. With a Cloud solution, growing companies can also easily bump up the number of users and transactions without having to invest time and money into updating On Premise infrastructure. Primary Reasons for Adopting Cloud Technology: Collaboration Across Locations 37% Requiring Scalability Key Benefits of Deploying Cloud Software: Having a Global Workforce Across Time Zones 29% 29% Ease and speed of updates and service: Limited on premise infrastructure maintenance saves time and money. Global access to information: View or enter documents and report on financial data any time, anywhere. Collaboration across corporate entities and locations: Capture and gain visibility to a complete record of approvals, edits and comments. Room to grow: Easily add users and transactions as your company expands. Pay as you go: A cost-effective transaction-based pricing model allows you to just purchase what you need. Form 010 pg.2

3 5 Essential Drivers of Modern Accounting 1) Eliminate Manual Data Entry and Expedite Approvals On average, the cost to process an invoice is $14.21 and the time it takes is 12.4 days; on the other hand, for best-in-class companies, the average cost is only $2.42 per invoice and takes just 3.7 days to process (Bartolini 22-23, 26). Roughly $12 in savings might not seem like much, but it translates into $12,000 in savings for 1,000 invoices. By eliminating the need to manually carry out tasks and by helping to reduce the number of late and duplicate payments, accounts payable software plays a direct role in cutting operational costs and bolstering your organization s bottom line. Automation: Save Time with Touchless Invoice Processing. Touchless processing is the key ingredient for making accounts payable more cost-effective and efficient; without ever laying hands on an invoice, an AP transaction can be completed for payment. Some software solutions launch touchless processing and initiate an AP transaction when employees or vendors an invoice to a Document Service. Because these solutions gather the date and vendor information from the , employees only have to enter the amount and invoice number before submitting the invoice for approval. Touchless processing also means that employees don t have to manually manage the document after the fact; the software matches the invoice to the PO and receipt, sends it into an approval workflow and stores the document. Most common reasons for late payments and missed discounts: Other Other 58% Approval Times 68% Manual Routing of Invoices In a 2014 report by the research firm PayStream Advisors, respondents cited approval times (58%) and manual routing of invoices (68%) as the most common reasons for late payments and missed discounts (2). With out-of-the-box approval workflows and automated reminders, accounts payable software can help your accounting team lead the charge for expedited approvals and payments. Accounting can effectively use the software to pin down any bottlenecks and fix them right away. Form 010 pg.3

4 2) Ease of Use: Submit, Review & Approve Documents on Any Device. Another force that has propelled the accounting team out of the back office and into the open is easy-to-use, mobile first software. As Aberdeen Group reports, Leaders (the top 35% of respondents based on performance) are 43% more likely than Followers (the bottom 65% of +43% respondents) to utilize mobile applications for accounts payable (Castellina 6). From a design perspective, mobile first simply means that the software was built first for smartphones and then adapted for tablet and desktop screen sizes. From a user s perspective, the user can employ any device to submit, review or approve documents while retaining a consistent and optimal experience. Deploying a mobile first application also means that your organization manages only one application (that works across devices and operating systems), as 0 Leaders (Top 35%) Followers (bottom 65%) opposed to having to manage multiple ones. Be Productive, Be Collaborative, Go Mobile First How exactly does a mobile first application position your accounting team as the new hub of insight and collaboration? Quite simply, this type of application allows employees and managers from across the organization to submit, review or approve AP invoices, vendor contracts, purchase requisitions or expense reports from anywhere and at any time. By prioritizing the user experience, mobile first software encourages increased communication, not only between employees and managers but also between accounting and the rest of the organization. Swifter invoice and expense report submission and approval means that accounting can issue early payments to capture discounts, avoid late payment penalties and reimburse employees in a timely manner. Form 010 pg.4

5 3) Visibility: Gain Insight into Cash Flow. Cloud accounts payable software provides the modern accounting team and organizational leadership with the necessary visibility to guarantee a smooth purchase-to-pay process. By having the ability to see where AP invoices are in the approval process, accounting gains more insight into the cash flow of the organization. Aberdeen Group has found that leading organizations are 74% more likely to have visibility to cash flow than all other organizations, which allows them to handle invoice exceptions more quickly and reap the full benefits of payment terms (Castellina 8). For instance, if accounting receives a notification about a mismatch between an invoice and PO amount, they can quickly review this information and resolve the issue with the vendor. Collaborate for More Effective Spend Management Invoice is Scanned or Received directly from Vendor. An example of how the right Cloud software solution can open up ample opportunity for collaboration between accounting and the rest of the organization is during your vendor contract management cycle. A procurement solution with vendor contract management allows employees to select the appropriate vendor (from the imported Vendor Master File) for the contract and enter all contract details before submitting it for approval. When approvers review the vendor contract, they can easily send comments back to the employees or make edits. Once the contract has been approved, invoices and purchase orders can be released against the contract and accounting can routinely report to the CFO on budget remaining for that particular project. From purchasing to accounting to the CFO, Ariett Software facilitates real-time communication, promoting more effective spend management under a vendor contract. From vendor.com Vendor information is captured. Transaction Created. Form 010 pg.5

6 4) Advanced Reporting: Analyze Spending, Budgets and Bottlenecks. Accounts payable automation opens up a golden opportunity for accounting to utilize reporting and business analytics based on specific metrics and dimensions. With the right reporting tools, the accounting team can deliver insight to the executive team regarding spending, vendor contracts, operational bottlenecks and department budgets. As of this year, 42% of Leaders reported having AP business analytics while only 29% of Followers reported having this capability (Ball 9). Because advanced reporting and analytics are essential for making positive spending decisions, more and more organizations are adopting spend management software. Improve Your Month-End Closing In particular, AP automation software has the power to truly transform the month-end closing process for accounting. With an easy-to-use reporting dashboard, the department can generate a number of reports to help expedite the process and ensure the accuracy of financial statements for each month. Popular Reports for Month-End Closing: Invoices in Process Report: Generates a complete list of all invoices that have yet to be posted before the end of the month. Invoice Accrual Report: Keeps an accurate record of accruals for month-end financial statements. Invoice Audit Trail Report: Tracks approvals and routing history, so CFOs and auditors can easily determine compliance with company procedures. Invoices Awaiting Approval Report: Assists accounting in making sure that invoices are approved before their deadline. Duplicate Invoice Report: Catches duplicate invoices before any payments are made. Historical Credit Card Report: Displays a complete record of credit card transactions that have been imported onto an expense report. Open Credit Card Report: Details credit card charges that have been imported into the software solution but are not yet listed on an expense report. Automate Credit Card Reconciliation For an improved month-end closing, it s also important to have a solution that will assist you during your credit card reconciliation process. With the right solution, you can check for credit card transactions that haven t been entered into an expense report by running a report for a defined period of all credit card transactions. This capability encourages timely reporting of employee credit card expenses before month-end closing. Form 010 pg.6

7 5) Deep Integration: View Data across ERP and Software Systems. One of the main challenges in accounting departments today is to find solutions that integrate with their legacy systems. As Aberdeen Group reports, 57% of the companies they surveyed identified a need for integration (Ball 3). Organizations are seeking solutions that integrate directly with their current accounting software so that accounting and key decision-makers can access financial data across systems. By having a more complete view of financial data, organizations can more effectively act on this data. This explains why leading organizations are 41% more likely than all other companies to have applications that integrate with their ERP system and serve as an auditable record (Castellina 10). Different Intergration Options So, how does integration with Cloud or On Premise ERP systems actually work? There are a number of integration methods that can be used, including read and write JSON web service, APIs and Accounting Extract Files. Leading AP automation software solutions can use these integration methods to import your vendor and general ledger information and transfer invoice data directly into your accounting software, such as Microsoft Dynamics GP or Intacct. This data sharing between systems allows the modern accounting department to have a more streamlined accounts payable process. READ & WRITE JSON WEB SERVICE CLOUD OR ON PREMISE ERP SYSTEM ACCOUNTING EXTRACT API DIRECT Form 010 pg.7

8 Moving Forward with Ariett: Now that you ve learned about the 5 essential drivers of a modern accounting department, how can your accounting team and your entire organization move forward? For starters, you ll want to look for a solution that prioritizes automation, ease of use, visibility, reporting and integration. By meeting these 5 criteria, Ariett Cloud Purchase & Expense Software offers your accounting team the opportunity to step up and become your organization s new center for collaboration and insight. Ariett s Automation: Ariett Cloud Purchase & Expense provides organizations with touchless invoice processing through the software s Cloud document service, Box4Dox. When employees or vendors invoices to Box4Dox, the document service automatically creates an AP transaction in Ariett with the date, time, vendor information and invoice attachment. In addition, Ariett s flexible and multi-tiered approval workflows, based on dollar amount, project, general ledger account or other criteria, can accelerate your approval process. Ariett s Ease of Use: With the release of Ariett Touch, our software s mobile first interface, Ariett has raised the bar for the user experience. The new interface includes intuitive navigation and tools that effortlessly guide employees and managers through submitting their expense reports or approving AP invoices on any smartphone, tablet or desktop. Ariett s Visibility: By storing all AP invoices, requisitions, vendor contracts and expense reports in a centralized electronic repository, Ariett Software gives your accounting and executive teams the necessary information for effective spend management. To access real-time data about employee or departmental spending, just use Ariett s search screens for a quick lookup for diving into greater detail you can always employ Ariett s reporting capabilities. Form 010 pg.8

9 Draft 1 Submitted 3 Contract Home Draft 4 Contract Submitted 3 Approved 2 User: Joe Sign out Version: Ariett, Inc. Contact Support Guide to Best Practices for Modern Accounts Payable Ariett s Reporting: Accounting can utilize Ariett s out-of-the-box reporting capabilities to provide insight into spending trends, bottlenecks and compliance with vendor contracts. To facilitate a smooth month-end closing, Ariett offers a number of reports including reporting on accruals, unapproved invoices, invoice exceptions and unreconciled credit card charges. Ariett s Integration: Ariett delivers automated integration with Dynamics GP, Intacct and other ERP financial systems. Using JSON web service and APIs, our software is able to import your Vendor Master File and general ledger accounts into Ariett. With Ariett s deep integration with your accounting software, your accounting team benefits from having visibility to the whole financial process from start to finish. Ready to make a move towards modern accounting? Start by visiting Ariett s website at or by signing up for a live product demonstration at /request-a-demo. About Ariett Ariett is the leading provider of Enterprise Purchase and Expense Software that reduces costs for organizations and improves employee productivity by streamlining requisition and purchase order management, accounts payable automation, document management and travel and expense reporting on a unified platform. We deliver innovative, web-based business software in the Microsoft Azure Cloud or On Premise that integrates directly with your ERP System. Please visit for more information and follow on Twitter. Vendors Spend Amount % of Total Top Vendors for the Company: TWO For the dates 1/1/2013 thru: 1/1/2014 Top Vendors $7, $5, $6, $3, $3, $2, $4, $3, $2, $20, Beaumont Construction $5, % CDW Sales, Inc. $6, % Computer Training Systems $3, % WWR Medical Supplies $2, % Kugel Engineering Company $4, % Comcast, Inc. $3, % Cowley Engineering $2, % Beaumont Construction CDW Sales, Inc. Computer Training Systems WWR Medical Supplies Ariett Mobile Touch Search Kugel Engineering Company Home Comcast, Inc. Cowley Engineering $ 6, User: Joe Sign out Version: Ariett, Inc. Contact Support $ 1, $ $ Home $ 6, Draft $ 1, $ 2, $ 4, Contract 4 Submitted 3 Approved 2 $ 6, $ 1, $ User: Joe Sign out Version: Ariett, Inc. Contact Support Form 010 pg.9

10 Works Cited Ball, Bryan. "Leaders' Winning Strategies for Common Issues in AP and AR." (2014): 3, 9. Aberdeen Group. Web. 3 Dec < Bartolini, Andrew. "EPayables 2014: The Quest." (2014): 4-23, 26. Ardent Partners. Web. 3 Dec < Castellina, Nick. "Achieve Business Agility Through E-Invoicing and Other Key AP Automation Initiatives." (2014): 6, 8, Aberdeen Group. Web. 3 Dec < PayStream Advisors. "2014 Invoice and Workflow Automation Report." (2014): 2. PayStream Advisors. Web. 3 Dec < Invoice and Workflow Automation Report>. Form 010 pg.10