1.  Centralize content.  Disorganization is the bane of any accounting process. According to the AIIM, 65 percent of A/R teams struggle to find the documentation needed to support invoicing. When a company can't find supporting documents, it won't receive payments from customers as quickly and it may permanently lose some income that it would be able to collect if staff could quickly access the proper documentation. In addition, AIIM found that 65 percent of finance professionals feel that finding A/P documentation is challenging in their company—creating delays and increasing the resource requirements for managing A/P.

The core problem is that the data leveraged by A/P and A/R comes from multiple source systems. A primary source is the company's enterprise resource planning (ERP) system, but other systems reside with the sales staff or with external vendors, customers, transportation carriers, freight forwarders, manufacturing and warehouse facilities, etc. If the information needed to streamline management of exceptions is not available in a centralized location to the company's A/P and A/R teams—with data from different source systems connected via unique identifiers such as vendor ID, account code, and customer name—then it cannot be leveraged seamlessly to automate payment and receivables processing.

In addition, data that is available only in paper form needs to be scanned and categorized so that the system can index and store the content in a data repository. One global personal- and health-care products provider that we work with was able to save $8 million per year, and cut in half the time it takes to process vendor invoices, by implementing a data repository. This company handles 80 percent of its A/P and A/R transactions via EDI and ACH. But the other 20 percent of its transactions are paper-based. The company began using an imaging solution to scan vendor bills on the A/P side and proof-of-delivery documents (PODs) on the A/R side, plus all the other documents needed to resolve exceptions. Giving collections and payments staff easy access to these documents accelerated the processing of invoices and significantly reduced the amount of staff time dedicated to exception processing.

The best automated A/R and A/P solutions can integrate all kinds of content formats into their data repository—including Word files, Excel spreadsheets, emails, videos, scanned documents, and even video or Web files. They also intelligently index and archive this content so that users can easily find what they need. A good automated A/R and A/P platform also includes balancing and reconciliation capabilities, which alert users to errors that sometimes slip past manual checks. On average, organizations that implement an automated accounting process are able to achieve "hands-off" processing on 35 percent of production orders.

2.  Integrate with core systems.  Centralization may entail storing all critical accounting documents that are clearly related to A/R or A/P in one place, but these documents don't exist in a vacuum. They all touch a number of different systems within the typical enterprise. Staff outside of A/P and A/R may store some relevant documents in an ERP system or a content-collaboration platform, but other crucial information may reside in paper versions of PODs, vendor correct action requests (VCARs), customer complaints or internal service failure notices, freighted bills of lading, sales contracts, and inspection certificates, to name a few. The payables and receivables software solutions must be able to communicate with all of the core systems that house relevant documents to ensure that no records become "lost in the loop."

Integrating an A/P or A/R automation solution with the company's core content management and ERP systems is a best practice. Disparate systems that function independently of one another and without effective integration will likely prolong accounting processes, while integrating systems can substantially reduce processing time.

3.  Unify across departments.  The A/R- and A/P-related systems that first come to mind are unlikely to be the only software in the company that contains information relevant to A/R and A/P processes. All major departments within an organization—including marketing, the service desk, management, operations, and legal—retain records that have a bottom-line effect on business operations. In our experience, A/R and A/P staff spend the majority of their time dealing with transactions that are not purchase order (PO)-based, or PO exceptions such as mistakes in amount, quantity, price, payment terms, etc. And in many cases, the information they need to resolve the exceptions is not readily available to them.

Some automated A/P or A/R solutions can centralize enterprise content beyond the documentation typically considered central to payables and receivables processes. When evaluating these solutions, consider whether a unified enterprise content management system could accept content from other areas of the organization, and whether doing so might improve transparency and yield cost savings within A/R and A/P.

Automation Brings Content in Focus

There's no doubt that good things happen when the money flowing into and out of an organization moves faster. When a company tightens up A/P and A/R processes, it eliminates the processing delays that result in inaccurate reporting, poor financial visibility, delayed business decisions, costly reruns, and wasted money. The Institute of Financial Management (IOFM) has found that applying best practices can shrink the average time to process a payable from seven days to four days, and that a high degree of automation can reduce the average cost to process a purchase order invoice from $7.58 to $3.70.

Centralization and automation are the two clear paths to best practices. When an entire organization is on the same page with regard to content storage, access, archiving, and auditing, and when the systems that staff use work in concert across different departments and applications, the company enhances its opportunity to make more-informed business decisions and improve cash flow.

Erin McCart is a solutions and product marketing manager at ASG Software Solutions. McCart oversees product positioning, messaging, analyst relations, and lead-generation activities for ASG's enterprise content management solutions.