100% of Your Supplier Invoices Will be Received Through ISP

During a meeting with one of our customers, where the account payable and procurement team were both present an issue arose. The account payable team was blaming the procurement team for delay in processing the supplier invoices they had received. A majority of the invoices they had received, they had done so by hand.

The process is as Mentioned Below:

• The supplier should deliver the invoice to the procurement team by hand
• They (clarify who ‘they’ is) are receiving a big number of invoices
• Procurement team should validate the invoice manually and if any documents are missing, the procurement team has to contact the supplier and notify them to deliver the missing documents
• After invoice approval, the procurement team has to deliver the invoice by hand to the account payable team
• Account payable team also has to verify the invoice, along with the supporting documents, taking into consideration the approval of the procurement team
• Account Payable team should get the approval of the finance manager prior to processing of the invoice
• After finance manager has approved the invoice, it [invoice] will be processed. At this point, the aging of the invoice will start
• Payment will be released based on their(clarify who ‘their’ is) payment terms

A common misconception that the supplier has is that the supplier assumes that the aging of the invoice has started as soon as the invoice is submitted to the customer. From the customer’s point of view, aging begins when the invoice has been accepted from the related parties within the organization. This gap has not been addressed to a majority of suppliers.

Due to the miscommunication between customers and suppliers, the following problems arise:

• There are a high number of calls from the supplier to the account payable team requesting to check on their payment
• There was a high number of supplier escalation which effects the team results and puts them in a position in which the management is unable to appreciate the outcome of KPI’s
• Supplier dissatisfaction as a result of the currently existing delays in payments
• Loss of accuracy in the cash-flow reports due to large payments, that were approved, but got lost in the manual process

Account payable team was discussing the plethora of problems that arises on a daily basis. They receive multiple calls a day, from various suppliers, inquiring about their invoices. Just for this task alone, they have assigned a team member who is solely responsible for handling these calls, in order to stop them from hindering their efficiency. The said team member is also responsible for locating the invoices of the supplier in question, often checking with the procurement team to know if they have the invoice, if it had been handed to them. Due to the heavy burden a time consuming process, there is a generalized loss of efficiency. This leads to a disjunction between management and employees. The maximal potential of the employees is not being reached, due to the heavy load in the department, causing management to suspect a lack of effort rather than overwhelming workload. The workload would not have been overwhelming had the gap between suppliers and management (mentioned above) been dealt with.
Also during the meeting, A.B from the accounting team was blaming S.K how the performance of the procurement team reflects badly on the accounting team. For which, the latter gets the blame. In reply, S. K from procurement team asked what measures should be put into place that would allow the team to finish the invoices they have on a daily basis, which is only growing daily.

The conversation kept going back and forth, until finally, they concluded that the workload will not change, and their current approach is not helpful. The current approach is tedious and results in loss of the invoices. The loss of the invoices does not go unnoticed, as the teams get behind on orders, frustrating both the management and the suppliers, leading to a poor result.

At that point, I intervened and asked them to guide me through the processes they are currently using to process their payments. They proceeded to list it for me on the board (as described in the first paragraph). While they were writing it down, I was using my machine to access the web of ISP, creating the same invoice process in it. When I shared it with them, they were acting as test users, approvers and could submit a test invoice in the system. The whole process: creation, users creation and activation didn’t take more than five minutes. The teams were shocked when they noted that ISP did the same job automatically; cutting long hours and laborious effort for them.

A.B asked me “Are you serious? This can be automated as easy as that? We can have all our suppliers with in the same web portal?” I told him yes it is that easy. We created this system keeping in mind teams who are responsible for processing the invoice of the suppliers, in regards to:

• Bridging the gap between the internal team within the organization
• Bridging the gap between the organization and its suppliers
• Reducing the number of errors that might be created from manual works
• Having more visibility on the submitted suppliers invoices
• Avoiding data accuracy errors in the cash-flow
• Reducing the load of suppliers follow up, where this will reduce the utilization of account payable team in administration work
• Unifying the channel of suppliers invoice submission to avoid loosing invoices

The teams were surprised with the ability of the system to have a process created in a short period of time In addition; all the suppliers were in one place, allowing for better handling. After a short trial period, which included using this software with some of their actual suppliers, they were satisfied and purchased the system. Now, they send us thank you emails after having 100% of their suppliers onboard the system and using it to submit all their invoices.

Moral of the story is that ISP will help you build one channel. This channel will gather all your suppliers in one place, to allow for convenient invoice handling. This helps you in avoiding the daunting problem of lost invoices and lets you visualize the various suppliers and invoices.

Visit www.exceeders.com/store/invoice-submission-platform to learn more.

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