5 ‘whys’ for Accounts Payable and Process Mining
Author: Jenny Keane, Marketing Manager - North American Go To Market of PAF
Accounts Payable (AP) starts when an invoice is approved for payment, their responsibility is to process and review transactions between the company and its vendors and pay for invoices on time, and not pay for products and services it shouldn’t. Tracking the various departments and IT systems an invoice takes, is a complex task. AP has many levels of regulations, audit compliances and policies to provide accuracy of final reporting or archiving.
By visualizing the AP process, Process Mining maps the paths between the initial receipt and the payment of said receipt. Ultimately, improving your On-Time Payment and allowing you to take instant action against habitual and consistent problems in your process, preserving liquidity for the company.
Here are five valuable business benefits PAFnow Process Mining tracks
1. Capitalizing on Cash Discounts
Save thousands by tracking and paying the lowest price with a click of a button
Process Mining allows you to find the invoices where you lost out on discounts and then provides a process picture to understand in which timeframe the discount was missed. With PAFnow insights helps you create a plan that will allow you to gain as many discounts and save as much money as possible.
2. Days Payable Outstanding (DPO)
Improve cash flow by shortening the time it takes your company to pay bills and invoice suppliers or vendors
PAFnow can link attributes to your process. You can investigate invoice or procurement that was/is outstanding and then dive into the “who, what, where, when, and (hopefully) why”. For example, errors in invoices such as wrong figures and vendors who are having an adverse impact on working capital. PAFnow can discover late deliveries from those suppliers or vendors allowing you to renegotiate future contract or payment terms accordingly.
Alternatively, you may find that you are having issues paying invoices on time during a certain time of the year, affecting liquidity issues. With PAFnow, you can adjust the pay period or order at different times, if possible.
3. Duplicate payments
Eliminate making duplicate payments
Yes, this happens. A decent number of organizations allow payments to be made by employees outside the AP department, however this creates an opportunity for activities to be performed by the same user. Similarly, vendors (sometimes through no fault) deliver multiple invoices. With Process Mining, AP can identify these immediately.
4. On-time payment rate
Visualize the receipt-to-pay time and receive real-time alerts to reach on-time payment
What is the average time it takes to process an invoice from when it is received to when it is paid and archived? With late invoices acting as the primary reason for late payments you can pinpoint the number of days wasted with manual labor, where vendors are still paying with paper invoices.
5. Touchless processing to meet SLAs
Pinpoint the number of days wasted with manual labor
A robust touchless processing rate for invoice influences the AP KPIs above. Removing manual steps reduces AP team’s costs and shortens lead time to process an invoice. This places AP as a highly effective and efficient function for finance. The most profitable outcome of increasing touchless processing rate is the ability to capture cash discounts as we mentioned prior.
Learn more about our PAFnow Procure-to-Pay (P2P) solution