Accounts Payable (AP) Best Practices
“We’ve significantly expedited our AP processes. Data is seamlessly exchanged between our financial system and Envi. We’ve greatly reduced manual processing time, increased the number of invoices we process electronically, and benefit from automatic invoice validation, increased accuracy, and reduced late fees.”
Taylor Richardson, Peachtree Orthopedics
Leverage current contracts for best prices
Implement automated 3-way price match
Be able to take advantage of early pay discounts
Step 1: Go back to the beginning – just for a moment – and make sure you’re creating an electronic purchase order (PO) for every purchase
🗸 POs are the foundation of great AP processes
🗸 PO approval on the front-end of the purchasing process helps reduce time, effort and inaccuracy on the back-end
🗸 POs are the first step in automating the 3-way price match, setting the stage for accurate payment
Step 2: Have you maximized EDI capabilities with your vendors?
🗸 For your 3-way match, you’ll need electronic acknowledges or ship notices, or receipts created as packages are received by your organization, and electronic invoices
🗸 Make sure your vendors are able to provide both 855s (or 856s) and 810s to cover these requirements
🗸 With these 3 EDI documents, you’ve got what you need for a highly automated and accurate 3-way match to enable world-class AP processing, plus you’ll eliminate manual processes and keying errors
🗸 Matching helps you validate not just price, but also accurate quantities
Step 3: Fully leverage contract opportunities
🗸 Make sure all purchasing is driven through your approved product formulary, and of course, make sure those frequently-purchased items are all on contract
🗸 Standardizing your product formulary helps drive consistency of both price and quality
🗸 A robust product formulary means all incoming products are already identified and coded for processing
Step 4: If any vendors are still sending paper invoices, convert them immediately
🗸 If some selected vendors have no EDI capabilities, look into conversion services that will take paper documents and convert them to electronic
🗸 810s make matching, payment, and archiving easier and faster
🗸 Faster processing and payment helps you take advantage of available early payment discounts
Step 5: Don’t pay invoices without proper documentation
🗸 Receiving is a critical step to documenting incoming supplies, ensuring you’ve received the items about to get paid
🗸 Exception: There may be invoices for non-PO services; everything else should have a PO
Step 6: Use your new capabilities to check for price parity
🗸 With these processes in place, you’ve made it easier to look across your organization at price parity – are you paying the same price for the same item every time it’s ordered?
