Can your firewall stop bad invoices?

As invoices are approved automatically, AP’s main responsibility is no longer handling, but  exception handling – The Accounts Payable Network 

While everyone clearly understands the benefits of automating the P2P process in terms of  freeing up the AP department from the time consuming task of approving invoices, studies  show that we are still a long ways from achieving a level of efficiency that reduces the AP role  to one of managing exceptions. 

According to an Institute of Financial Operations article, days sales outstanding (DSO) are at  “record levels” averaging 42 days in the U.S. The cause of slow payments is directly related  to defective invoices sent by trade vendors. In fact, defective invoices (invoices that don’t  reconcile) account for “nearly two-thirds (63 percent) of past due payments,” and on average,  take “two to three times longer to be paid than clean invoices.” 

This provides indisputable evidence that automation of the P2P process alone is not  enough. All it does is ensure that bad invoices are delivered faster. What we really need is a  firewall that will stop bad invoices from entering the AP process to begin with – a Compliance  Firewall. 

A Compliance Firewall enables you to move from Paperless to Errorless and Effortless so that  you can truly manage by exception. 

With the Compliance Firewall, invoices are automatically reconciled with purchase orders and  receiving records to ensure compliance with your payment policies. In case of a mismatch,  the invoice is automatically returned to the supplier to be corrected, without any effort on  your part and before it enters your ERP system or your AP process. This pre-emptive validation  capability will enable you to achieve a near 100% invoice reconciliation while providing  suppliers with instant acknowledgement and confirmation. 

But aren’t you just shifting the work to the supplier, some skeptics may ask? Yes we are, and suppliers are quite happy about it.

Rather than send a bad invoice into a black hole (no offense to AP), where the invoice may  take weeks to be approved and at the end of the day may be rejected altogether, suppliers  are now empowered to make sure their invoices are compliant. Once they do, they are  rewarded with quick payment and automated approval that takes just minutes. 

This level of transparency is, as one supplier described it “one of the biggest advantages, as  we now know within seconds if there is an issue with an invoice. Previously, we had to wait  until the due date to learn that the invoice wasn’t going to be paid.” 

Is there a supplier that wouldn’t like that?