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Get Control of Your Accounts Payable and Save Time and Money

There is one work-flow in all businesses that – once automated – can save you time and money. It is your accounts payable.

A lot of businesses have not taken advantage of inexpensive software that can fully transform this bottlenecked part of most businesses.

How Most Businesses Do It Now

Here are some of the issues with current practices for most businesses:

  • No Purchase Orders are done so expenses are incurred and approved after the fact
  • Bills from vendors are entered manually by Accounts Payable clerk so time is wasted, and errors often occur
  • No matching to Purchase Orders is done, so there is little control over authorized expenses and businesses end up over-spending
  • Getting approvals from department heads and management in a quick and orderly fashion does not happen slowing down bill payments and irritating your vendors
  • Paying that approved bill is error prone, time consuming and if you are still writing cheques, can result in fraud.

When managing your business in the cloud, you can take advantage of 4 powerful software programs, that combined, can transform the entire cycle of bill payments, giving you tighter controls, and 24/7 access from any device, including your Smartphone.

Let me show you how this saves time and money…

By the way, for those of you that are holding off on getting your accounting into cloud for perceived security reasons, let me assure you that you are already there with the most sensitive data you own, so worrying about risk is a non-issue.

You Are Already in The Cloud, so Relax

Let me explain.

If you use emails like Gmail, or Outlook, or Yahoo – you are in the cloud with all your sensitive emails residing on remote servers.

If you use online banking all your bank transactions are in the cloud.

If you use a credit card all your purchase details reside on remote servers – in the cloud.

And, consider that those 3 things are all much more highly sensitive than the debits and credits inside your accounting software.

Ok, let’s get back to our work-flows in the cloud that will save you money and time…

There are 4 aspects of the automation process that will improve your controls, lower expenditures by planning better, and speed up the entire cycle.

Step 1 – Purchase Order

By having people create a Purchase Order, which is then approved by a manager this puts control where it belongs – before you spend money, not afterwards!

The Purchase Order can be created in a cloud-based software service like ApprovalMax.

After the Purchase Order is created, an email notification will go to the appropriate department head to authorize (or not) the planned purchase.

And, before all that is done, a budget can be created for planned expenses by department. Then when expenses are incurred, the bills coming in are compared against the budget to track how much is left to spend for the year.

The steps of creating and approving the Purchase Order can have as many people as you want to add in the work-flow to approve an expenditure.

For example, a Purchase Order can go from a manager to the controller to the CEO for final approval.

Step 2 – Document Extraction

This is where bills get emailed or uploaded to a software service that extracts the key details on the vendor bill and posts automatically to the general ledger in the accounting software.

All of that is done automatically and the PDF copy of the invoice will flow through the system.

The bill seamlessly flows from the document extraction software (we use HubDoc) to the accounting software.

That initial bill together with an e-copy of the bill will sit inside a “bucket” in the software that are “unapproved” invoices.

At the same time these “unapproved bills” flow through to ApprovalMax….

Step 3 – The Bill Flows to ApprovalMax

Inside ApprovalMax, the bill will be matched automatically to a Purchase Order (PO) -either one bill to multiple PO’s, or multiple bills to one PO.

Now the bill must go through the work-flow of approval according to how you setup the approval steps.

This is all fully online and automated, and fully transparent.

Consider that in the current practices of most businesses (non-automated work-flows) bills may be bottlenecked on someone’s desk in a location that you have no access to.

When that bottleneck happens, everything stops.

With software like ApprovalMax you can see where the requests are sitting idle!

Also, each “approver” gets a list every day of outstanding bills to approve or reject.

A deadline can be set to remind someone 24 hours before approval is needed.

When you are approving a bill as approver, you can see everything you need:

  • A PDF copy of the bill
  • How much has been spent compared to budget
  • If it matches correctly to an approved Purchase Order

When you approve, you simply hit “APPROVE” button, and that digitally “signs” the document as approved and it moves to the next authorized approver.

Step 4 – The Bill Gets Paid

Now that the bill has been approved inside ApprovalMax, it gets automatically updated inside the accounting software from the “unapproved” bucket to the “approved for payment” bucket.

All the e-paperwork will be attached to each transaction – the bill from your vendor PLUS the ApprovalMax approval and who e-signed those approvals.

Now, the bill can be paid.

With online bill payment services like Plooto, the e-documents flow into the software, ready to be paid with a click or two of your mouse.

As well, just like ApprovalMax for the initial PO and bill, inside Plooto, multiple levels of authority to approve or reject payments gives you tight control over final payments.

Let’s Summarize

In step 1, a Purchase Order is created – bringing control over expenses in before money is spent

In step 2, details on a vendor bill are extracted and posted to your accounting software, all with human review but no data entry required, saving time and money.

In step 3, that bill is compared to the Purchase Order and the budget for that project or department for proper matching. This makes sure you don’t approve or pay for something you didn’t order. All this is fully automated.

In step 4, the approved bill gets paid.

The beauty of this fully automated paperless system is that the only human interaction comes in at the most critical steps, not wasted on data entry and chasing paper.

Here are the human steps:

  1. An electronic Purchase Order is created
  2. A bill (after being pre-coded automatically) is reviewed for correctness
  3. A button is clicked to “APPROVE” or “REJECT” a bill and Purchase Order
  4. A button or two are clicked by each payment approver to pay the bill online to your supplier

Lastly, you may be thinking that a physical signature is better than a button clicked. Not so.

The button you click gives a date, and time stamp into the system related to THAT document and connected to the email address and IP address of the approver. It cannot be erased, manipulated, or deleted. (There is a step to “UNAPPROVE” a previously approved bill though).

So, if you want to save time and money and gain more control of your expenses using purchase orders, approval work-flows, and budgets, I recommend you consider these 4 powerful software services to:

  1. Do your document extraction more accurately than a human (Hubdoc)
  2. Control expenses by budgets and Purchase Orders and proper approvals (ApprovalMax)
  3. Your main general ledger accounting software (we love Xero)
  4. Pay your bills online (we use HubDoc)

Thanks for reading…