Accounts Payable automation: Workflow

Magic Elixir or Snake Oil?

There is a common understanding among those considering accounts payable automation solutions – that is, workflow is a key element of successful accounts payable automation. Likewise, there is a common misunderstanding – that all workflow is the same.

It is a shame those of us who provide accounts payable automation solutions use one term – workflow – to mean wildly different things. Quite frankly, we’re to blame for this confusion. In accounts payable automation, workflow processing can do many things. It can be used to do the following, just to name a few:

  • Automatically route those invoices which need to be coded for general ledger distribution (non-PO invoices) and approved (commonly, non-PO invoices and 2-way matched PO invoices – those without receiving data)
  • Automatically code an invoice by picking up one or more standard general ledger account codes associated with a given supplier
  • Automatically route invoices for payment authorization (based on a company’s authorization matrix)
  • Allow for ad hoc routing of invoices based on security permissions in the workflow to do so
  • Automate processes including automatic matching of PO-based invoices with purchased order data (2-way matching) and receiving data (3-way matching)
  • Automate the posting of invoices (or vouchers) into the organization’s associated ERP system for payment once they’ve been successfully coded, matched, and/or approved
  • Automate the management of exception processing (i.e., automatic matching which falls outside of tolerance, is waiting for receipts, etc.)

So, here are key points of differentiation between accounts payable automation workflow solutions:

  • Some solutions have predefined functionality to do these things, while others do not
  • Some come with predefined processes, while others do not
  • Some are hard-coded, requiring the client to adhere to inflexible, predefined, out-of-the-box processes, while others provide flexibility and configurability of these functions
  • Some solutions can automatically match at the line-item level, while others can only match at a subtotals level
  • Some solutions require IT technical resources to code rules to make the workflow solutions do what is necessary, while others provide process modeling tools which give non-IT technical, business process-oriented people the ability to maintain the process and associated business rules

We strongly encourage anyone who is considering the acquisition of an accounts payable automation solution to dig under the covers and go beyond the buzzwords – to see what exactly various solutions providers can bring to the table. So, if you have a requirements list for an AP automation evaluation and one of your requirements is “Workflow,” you need to go several levels deeper to define more explicitly what you desire from a workflow solution.