The next immediate step then is to find another vendor.

But do you have a process in place to source vendors? Does the purchasing team know what their roles and responsibilities are?

To ensure minimal disruptions to your operations, you need to plan for contingencies like vendor bankruptcies.

This is where a procurement plan comes in.

In this article, we’ll explain what a procurement plan is and why you should create one. We’ll also cover the steps to creating one for your company. Finally, we’ll look at how you can automate your purchasing processes with frevvo’s procurement automation software.

Click the links below to head to the section you want to learn more about:

• What Is a Procurement Plan?
• Why Do You Need a Procurement Plan?
• How to Create a Procurement Plan
• Automate Your Procurement Process With frevvo

What Is a Procurement Plan?

A procurement plan is a document that details the entire procurement process — the steps that companies follow to procure the goods and services they need to operate.

It also outlines roles and responsibilities for your purchasing team, defines vendor selection criteria, establishes the types of contracts you’ll use, and more.

The goal of a procurement plan is to streamline the procurement process. Instead of starting from scratch each time, you can simply pull up an approved plan and adapt it accordingly.

Procurement plans typically include the following details:

• Roles and responsibilities
• Needs and requirements
• Project timelines
• Project constraints
• Vendor selection criteria
• Contract types
• Payment terms and methods
• Risk management

We’ll dive into each of these in a later section. For now, let’s take a look at why you need a procurement plan if you don’t already have one. 

Why Do You Need a Procurement Plan?

Creating a procurement plan can help standardize your purchasing processes and even benefit your bottom line. 

Here’s how.

Reduces Supplier Risks

Managing supply chain volatility is one of the biggest challenges that many companies face. In fact, 56% of chief procurement officers have said that key suppliers have either gone bankrupt or have been severely hampered.

Creating a procurement plan to source and select vendors can help you reduce supplier risk. If a key vendor goes bankrupt or is unable to meet its obligations, your purchasing team can refer to the procurement plan to quickly find a suitable replacement.

Enhances Transparency

90% of business executives say that increased transparency leads to better decision-making across the organization. This also applies to purchasing. 

Without transparent processes, mistakes are bound to happen — employees may duplicate orders or make purchases using non-approved vendors. This can lead to overspending and even delayed projects.

A procurement plan makes the procurement process more transparent. And when you use procurement automation software, your purchasing team will be able to track each step of the process from one central location.

Helps Ensure Compliance

Creating a procurement plan can help ensure compliance with established policies.

Why is this important?

Aside from reducing the risk of errors, a procurement plan can prevent instances of maverick spending — when employees purchase goods or services outside of established policies.

Maverick spending can negatively impact your bottom line. In fact, companies lose as much as 16% of negotiated savings when purchasing teams don’t use preferred vendors. 

Enforcing a procurement plan can help ensure that all purchasing decisions comply with company-approved policies and vendors.

Lowers Procurement Costs 

With a comprehensive procurement plan, your company can source vendors faster, speed up negotiations, and pay invoices more quickly — all of which can help lower procurement costs.

In short, creating a procurement plan is extremely beneficial for your bottom line. It provides purchasing teams with everything they need and sets clear expectations.

Now, let’s look at how you can create a procurement plan.

How to Create a Procurement Plan 

Procurement varies from organization to organization. 

For example, large retailers will likely have different purchasing requirements than manufacturing facilities. However, there are certain details that every procurement plan should include.

Let’s take a closer look.

1. Describe the Procurement Process

In this step of the procurement plan, you’ll provide a complete breakdown of the procurement process starting from requisition to paying the vendor.

A typical procurement process involves the following steps:

1. Identifying internal needs
2. Evaluating vendors
3. Negotiating contracts
4. Approving an internal purchase requisition
5. Releasing a purchase order
6. Receiving and reviewing an invoice
7. Confirming and auditing delivery
8. Completing payment
9. Maintaining records

No matter what products or services you’re procuring, having a formalized purchasing process is key to creating a procurement plan. Work with your purchasing team to detail each step.

2. Outline Roles and Responsibilities

The next step to creating a procurement plan is to establish the parties involved in the purchasing process, along with their roles and responsibilities.

Here are some of the key functions of purchasing departments:

• Identify internal needs for goods and services
• Source reliable suppliers to meet requirements
• Negotiate prices and delivery terms
• Coordinate deliveries and shipments
• Run quality control and product testing 
• Ensure compliance with all regulations
• Manage budgets and maintain accurate records 
• Manage relationships with vendors

The purchasing team will consist of various professionals who are responsible for overseeing these tasks. These include a purchasing manager to supervise procurement-related activities, purchasing agents to evaluate suppliers, and a contract manager to prepare contracts.

Make sure that you outline the roles and responsibilities of your purchasing team. You should also specify who can make and approve changes to any procurement documentation.

3. Determine Needs and Requirements

This section of the procurement plan describes the goods and services that your company is looking to procure. It can include tangible goods like office equipment or raw materials and intangible goods like software licenses.

Regardless of what you need to procure, you should include all pertinent details — sizes, quantities, technical requirements, etc.

Make sure to also include a statement that justifies why you’re purchasing certain goods or services from external suppliers instead of sourcing internally. 

4. Define a Project Timeline

The next step is to set a project timeline. This is important because procuring goods before you actually need them will only take up valuable space.

An efficient procurement plan will include specific timeframes to minimize holding costs. This will also give your purchasing team deadlines for when they need to start and complete certain tasks.

5. Determine Project Constraints

Every project has constraints and limitations that it must abide by. Cost constraints are the most obvious example, as you may have a limited budget for purchasing goods and services.

Other types of project constraints include:

• Quality specifications
• Scheduling limitations
• Scope and deliverables
• Security requirements
• Industry regulations

Make sure that you detail any project constraints and limitations in your procurement plan.

6. Define Vendor Selection Criteria

In a typical procurement process, the purchasing department will issue a request for proposal (RFP) and vendors will respond with proposals or bids.

Then once the solicitation process begins, your team can collect proposals and evaluate each one. Defining vendor selection criteria can help you narrow down your choices.

Selection criteria can include:

• Costs: If a proposal doesn’t fit within your budget, you could either move on to the next one or enter into negotiations with the vendor.
• Delivery: If a vendor can’t deliver goods or services within your desired timeline, then look for one that can.
• Quality: Vendors must be able to meet certain quality standards before you can consider their proposals.

Establish selection criteria to find the right vendors. In this section, you should also specify who will make the final decision. You can also establish a small selection committee whose purpose is to evaluate and select vendors.

7. Select a Contract Type

Vendor contracts or vendor agreements are legally binding agreements in which both parties agree to exchange goods or services for compensation. 

However, there are different types of contracts that you can use. Common vendor contracts include:

• Fixed price contract: An agreement in which the buyer and seller agree to a fixed price regardless of other factors. 
• Fixed price plus incentive contract: An agreement in which you agree to pay a fixed price and an extra bonus if the seller delivers earlier than expected.
• Cost-reimbursable contract: An agreement in which a contractor receives a standard fee and reimbursements for any costs they incur on the job.
• Time and materials (T&M) contract: An agreement in which your company pays a contractor for their time and the materials used. These contracts are typically used in instances when you can’t estimate the size of a project upfront.

When preparing a procurement plan for any purchases, make sure that you select the right type of contract and get it signed.

8. Determine Payment Terms and Methods

This section of the procurement plan details the payment terms that you and a vendor have agreed upon.

It includes:

• Total costs
• Expected deliveries
• Due dates
• Payment methods

Some vendors may require advance payment, while others may offer more generous terms like net 30 or net 60. If you’re making stage payments over a period of time, make sure to specify exact payment dates to avoid any confusion.

9. Identify Potential Risks

There’s always a degree of risk when working with external suppliers. In this section of the procurement plan, identify any risks and outline specific strategies to mitigate them. 

For example, let’s say that a contractor fails to meet their deadlines. What impact would it have on your project timeline? In this case, you could either extend the deadline (and risk upsetting your customers) or hire an alternate contractor.

Follow the steps above to put together a procurement plan that you can use.

Automate Your Procurement Process With frevvo

With procurement software like frevvo, you can automate business processes like purchase requisitions, purchase orders, invoicing, and more.

The software includes pre-built templates and drag-and-drop tools, so you can easily customize your forms and workflows — without writing a single line of code.

Of course, any forms that you create for your purchasing processes will typically have to go through multiple parties for approval.

With the no-code workflow builder, you can incorporate dynamic routing into your workflows and ensure that your forms reach the right approvers.

Here’s an example of an automated purchase order workflow:

Once an employee creates and submits a purchase order, the system automatically routes it to their manager for further review.

Your forms and workflows are mobile-friendly out of the box, so your purchasing managers will be able to approve documents like contracts either from the office or on the go from a mobile device.

Start Automating Your Procurement Processes Today

Procurement plays a critical role for any business. 

However, purchasing the goods and services that your company needs to operate is a complex process. Missing any key information can result in delayed projects.

Creating a procurement plan can help you manage the purchasing process, from outlining roles and responsibilities to establishing vendor selection criteria and more. 

It can also make your purchasing process more efficient. If a vendor goes bankrupt, you won’t have to start from scratch to find an alternate vendor. You can simply pull up a procurement plan you’ve already created to speed up the process.

Of course, creating a procurement plan is only one aspect of purchasing. There are numerous steps involved between issuing a request for proposal and making a payment. Performing these steps manually will only slow down your purchasing process.

Fortunately, automation tools like frevvo make it easy for you to automate your purchasing processes. You don’t need a large budget or a team of developers either. The software is fully visual, so you can create your own automated workflows without coding.

Ready to get started? Sign up for a free 30-day trial to try frevvo’s procurement automation software for yourself.

The post How to Create a Procurement Plan in 9 Simple Steps appeared first on frevvo Blog.

A robust accounts payable process helps you stay on your supplier’s good side and gives you a better overview of your company’s cash flow at all times. You also protect yourself against fraud from parties posing as vendors.

In this article, we’ll break down the accounts payable process, its importance, and common challenges. We’ll also look at how you can streamline it with process management software.

Want to skip ahead? Use the links below:

• What Is the Accounts Payable Process?
• What Is the 3 Way Match Process in Accounts Payable?
• Why You Need a Robust Accounts Payable Process
• Top Accounts Payable Challenges (in a Post-Covid World)
• How to Streamline Your Accounts Payable Process with Process Management Software

What Is the Accounts Payable Process?

The accounts payable (AP) process is how companies manage payments to suppliers and vendors for goods and services they purchase.

AP breaks down the ordering and payment process into four steps:

1. Keep and catalog purchase orders (analog or digital).
2. Receive invoices from suppliers based on goods or services rendered.
3. Review the vendor invoices (with the three-way match process).
4. Pay the invoices.

If you want to get specific, you can break it down further than that, but this is the core process.

Unlike the accounts receivable process — which is essentially about collecting owed payments from customers —  AP focuses on “outgoing” cash flow, not incoming. It’s about managing the money spent on supplies from vendors you need to create new products or deliver services.

What Is the 3-Way Match Process in Accounts Payable?

The three-way match process compares all incoming invoices against the purchase order and receipt bill.

These three documents are the key to maintaining a secure and accurate accounting system:

• Purchase order: The receipt of your original order from the supplier or vendor.
• Invoice: Bill for services rendered or delivered goods.
• Receipt or receiving report: Document that describes the goods or services received.

They’re the standard internal controls your team goes through before confirming any vendor payment. Only after your team ensures a complete match do they process any payment.

For example, suppose you order a new supply of leather to finish a batch of bags. In that case, your company will accurately track every detail of the transaction, including invoice receipts and receipt confirmation for goods, and they’ll confirm that everything lines up.

That’s the essence of the three-way matching process in AP. An accounts payable department that masters this process can help reduce risks related to sizable vendor orders.

You can reduce the risk of fraud, improve your payment management and supplier relationships, and more.

Why You Need a Robust Accounts Payable Process

55% of executives say AP is very or exceptionally valuable to their organization. A robust AP process is crucial for maintaining healthy supplier relationships and protecting yourself from fraud.

Let’s look at why you need a strong AP process in more detail.

Build Healthy Supplier Relationships

77% of companies are investing in deeper supplier relationships. But at the same time, many companies don’t even pay their invoices on time.

30% of small businesses experience negative effects from late invoice payments — it’s one of their main concerns about doing business with other companies.

Always paying your invoices on time with the correct amount the first time around is the foundation of a strong supplier relationship. 

Build rapport by never exceeding invoice due dates, making it easier to get special treatment when you need it — like fast handling on last-minute orders.

Protect Yourself Against Fraud

If you order a large volume of goods or services, especially digital services, maintaining the accuracy of every single minor transaction can be a challenge. Without proper bookkeeping, it’s easy to lose track and fall victim to fraud.

It even happens to the biggest companies in the world. Facebook and Google lost over $100 million to a single vendor fraud case, where a group of swindlers impersonated one of their suppliers.

By always comparing invoices to outgoing purchase orders and receipt reports and looking for discrepancies, you can avoid vendor fraud altogether. Your team will never authorize credit card payments for purchases that you never made. 

And this is only one of many procurement risks AP can help with.

Get a Better Overview of Your Cash Flow

Not having a handle on your cash flow can be a costly problem, stopping your business from taking on new projects and growing. 52% of U.S. SMBs have lost a project of $10,000 or more because of insufficient cash flow.

By documenting all vendor transactions, you can estimate monthly expenses and make better decisions about cash flow. It also makes it easier to create financial statements like a balance sheet for your company’s shareholders.

Of course, manually tracking every company credit card in an excel sheet isn’t the most effective way to get things done. Instead, automated invoice processing can help you match, process, and log all payments correctly without painstaking data entry.

But it’s not at all smooth sailing. Accounts payable departments worldwide are facing a growing set of challenges in a post-pandemic landscape.

Top Accounts Payable Challenges (in a Post-Covid World)

Let’s look at some of the biggest challenges AP teams faced in 2020 and what you should do about them.

Working Remotely Is Becoming the New Normal

2020 was a year that changed the working lives of virtually every AP department out there. While traditionally most worked in the office, now 91% of AP professionals work remotely at least some of the time.

That comes with its own set of challenges, like effectively digitizing the process and finding accounting software solutions to invest in.

It also highlights existing issues, like a workflow centered around printed receipts and invoices and manually confirming all invoice data.

Supplier Inquiries and Invoice Exceptions

In 2020, AP employees spent 22% of their time handling supplier inquiries. They might need extra time to deliver a shipment, or they may not be able to deliver the full amount.

That means you need to change everything from the original purchase order to the invoice in order to ensure that your numbers match up later.

A digital process and accounts payable automation can make it easier for your team to adjust to these types of changes. They can quickly look up original orders and then confirm and make changes to data while on a call with the supplier — no need to comb through filing cabinets.

Using Too Much Paper

With an analog approach, you print at least three sheets of paper for every purchase order and item you receive — the order, receipt, and invoice.

4 out of 10 accounts payable teams feel they use too much paper, especially as companies face increasing pressure to become greener.

The solution is simple but not easy: going paperless (more on this below).

Invoice Approval Takes Too Long

51% of companies say that invoice approval takes too long. With the traditional manual review process of invoice data, who can blame them?

If your backlog builds up, that can lead to an overworked AP department — more prone to human error — delayed invoice payments, and worsening supplier relationships.

A slow process also increases your risk of breaking payment terms and incurring late fees.

One of the root causes for slow invoice approval is incorrectly-filled-out purchase orders that lack information. A manual process leaves you vulnerable to delays caused by human error.

While the global pandemic hasn’t left AP unscathed, many top challenges are still the same as they were before, like using too much paper or taking too long to approve invoices.

How to Streamline Your Accounts Payable Process with Process Management Software

Using process management software like frevvo, you can streamline your AP process from start to finish without coding any complicated programs from scratch.

You can even automate certain parts of the process to eliminate the risk of human error, increase efficiency, and pay more invoices on time.

Let’s take a look at how you should set this all up.

1. Create Digital Ledgers for Vendors and Suppliers

The first thing you need to do is create digital ledger accounts dedicated to all your existing suppliers. This will help the system automatically index and categorize purchase orders and invoices according to the data in the form.

In essence, this is how you organize your “digital filing cabinet” with a smarter AP process. Most companies already have some kind of general ledger set up in their ERP (enterprise resource planning) software.

The problem is that most companies try to maintain the data in their ERP with manual processes and data entry.

Instead, you should set up a digital process that automatically collects, stores, and even matches and validates invoices.

2. Handle Purchase Orders and Invoices Digitally with Custom Forms

Set up custom forms for vendors and internal teams to digitize your records, plus eliminate paper waste and time-consuming data entry.

With frevvo’s dynamic form builder, you can easily create purchase order forms that suit the needs of you and your vendors — without writing any code.

You can start with a template and quickly add all necessary fields to ensure your employees fill out the required data points for each purchase order.

This is the first step toward streamlining your ordering and invoicing process with automated form processing — next up, you need to automate your authorization workflow.

3. Use Business Logic to Automate Complex Payment Authorization Processes

Even if you have a multi-faceted invoice authorization process depending on the amount, you can still automate it successfully. But to do that, you need a solution that can handle complex business logic.

For example, you might follow a process where different people authorize invoices of different sizes.

With frevvo, you can easily create a process like this for your purchase orders and invoices with our visual workflow builder.

For example, you can quickly set up rules that will automatically tie in a VP or head of departments to confirm large purchase orders.

You can also create rules based on factors other than price, such as purchase category. If an employee is ordering a marketing video, you can tie in the VP of marketing, not just the head of finance.

frevvo’s forms support authorization with legally binding electronic signatures, which means your team can quickly handle the entire process from start to finish within the platform.

For more tips on how to streamline this process for your vendors, check out our post on best practices for AP automation.

4. Track the Status of All Purchase Orders in Real-Time (And Eliminate Late Payments)

frevvo helps you integrate your invoice approval workflows into your ERP system and ensure your records are up to date.

You can even create a custom real-time dashboard that tracks your invoices due and helps you visualize your cash flow.

It may sound complicated, but Central Wyoming University was able to fully automate its purchase order workflow with frevvo in under ten days. 

They transformed from a completely paper-based system, struggling with human error and lengthy approval processes, to a smooth automated workflow.

Start Automating Your Accounts Payable Process Today

While most companies already have an accounts payable system in place, they likely face a wide range of challenges, including fraud, delayed payments, and poor supplier relationships.

Unless you want to invest big in developing a custom solution from scratch, a powerful no-code platform like frevvo is key.

With frevvo, you can streamline your accounts payable process from start to finish. You can even automate key elements of your AP process, like invoice authorization, and use digital forms to get rid of manual data entry.

With our drag-and-drop builder, your AP team can set up and control their own processes and digital workspace, ensuring fast adoption and no issues with developer miscommunication. Get started today with a 30-day free trial to set up an entirely new workflow.

The post Accounts Payable Process Explained: Challenges, Benefits, and Best Practices appeared first on frevvo Blog.

Slow processing times can damage relationships with your vendors and hurt your company’s long-term success.

Coding errors can result in items being billed to the wrong projects or GL categories – problems that are often hard to find and fix later.

So how can you easily manage incoming invoices, categorize them, ensure they’re valid, and make payments on time? How can you streamline and automate these processes?

This article will cover invoice management and some of the challenges that companies face when managing invoices. We’ll also look at how you can create an automated approval workflow using software from frevvo to streamline the invoice management process.

Click the links below to navigate to the section you want to learn more about:

• What Is Invoice Management?
• Top Invoice Management Challenges
• How to Automate Invoice Management in Five Steps
• Essential Features of an Invoice Management System

What Is Invoice Management?

Invoice management is the process by which supplier invoices are received, coded, approved, and submitted for payment with full visibility into spend metrics.

To put it simply, invoice management involves managing accounts payable (money you owe to vendors) according to the business norms established by your organization.

Every company has different processes, but a typical invoice approval workflow looks like this:

1. Receive invoice
2. Verify invoice
3. Flag irregularities
4. Approve invoice
5. Issue payment
6. Bookkeeping

Invoice management may seem straightforward on the surface — once you review and approve an invoice, you issue payment and record it in your accounting system.

However, one survey found that 13% of invoices to small businesses are paid late. In addition, companies spend an average of 15 days a year chasing unpaid invoices.

It’s possible to manage these invoices manually, but it’s an inefficient way of doing things. 

From printing paper invoices to chasing signatures for approval, manual invoicing increases turnaround times and the likelihood of costly mistakes.

Paper-based invoices might work for very small organizations. However, as you grow, it quickly becomes more cost-effective to use invoice approval software. This will help your company scale invoice management and handle a growing volume of invoices.

Let’s look at how invoice approval software helps your company address the common challenges of manual accounts payable (AP) processes.

Top Invoice Management Challenges

Without the right systems in place, organizations struggle to maintain an efficient process for managing invoices. Here are the top pain points of manual AP processes.

Let’s look at how using invoice approval software can help address some of the top challenges.

1. Manual Data Entry

Manual invoice processing is extremely time-consuming. Depending on the number of invoices your company processes, your team can easily spend hours on data entry alone.

In fact, 38% of small business employees say that data entry is their most time-consuming task.

Manual data entry takes your employees away from more productive tasks.

Entering data manually also increases the risk of errors. From adding extra zeros to missing decimal points, even a small error can lead to issues like overpaid or underpaid invoices.

With invoice approval software, you can digitize invoice forms and processes and have fields populated with pricing data from a database. You can also have fields automatically calculate totals based on quantities and unit prices, which helps reduce manual data entry and the risk of human error.

2. Manual Routing of Invoices for Approval

The problem with manually routing documents and chasing down signatures is that it often leads to long cycle times — the time it takes to complete a task. This can delay invoices and strain relationships with your vendors.

Novice organizations, companies that rely on manual processes, take 45 days on average to process invoices from receipt to approval.

Innovators, companies that have digitized their processes with automation tools, take just five days on average to process an invoice. They also have much lower processing costs.

With invoice approval software, you can create a workflow that automatically routes invoices to the right approver. This way, employees don’t have to waste time hunting down signatures.

3. Lost or Missing Invoices

Without an effective invoice management system in place, it’s possible to misplace or even lose invoices that you receive.

You might not even realize that you have an unpaid invoice until a vendor follows up. Since the invoice has gone missing, you would have to ask the vendor to send another one which reflects poorly on your company.

Using invoice approval software can help you avoid this problem. It allows you to track incoming invoices and you can even set notifications when due dates are approaching.

4. Invoice to Payment Matching

Payment matching is a practice that companies follow when processing invoices. It involves matching an invoice against a purchase order.

The point is to verify the legitimacy of incoming invoices, which is important, as 82% of organizations have reported instances of payment fraud.

With frevvo’s invoice approval software, you can integrate your workflow with your accounting system and perform this matching automatically. It ensures that you only pay what you owe, no more and no less.

5. Inability to Approve Invoices in Time to Capture Discounts

Vendors may offer discounts for making early payments. A common discount is 2/10 net 30, which is when buyers can receive a 2% discount if they pay their invoices within ten days. 

Those discounts can translate to huge savings depending on how much business you do with a vendor. However, many companies aren’t able to approve invoices in time due to slow invoice approval processes.

Automation can improve processing cycle times by 73%, allowing you to take advantage of early payment discounts. This also helps you maintain positive relationships with your vendors.

The challenges above are some of the top pain points of manual processes. The good news is that implementing invoice management software can help you address them.

Let’s look at how in the next section.

How to Automate Invoice Management in Five Steps

It costs companies $12.90 on average to process a single invoice. Using automation software can help you automate invoice approvals and reduce processing costs.

With frevvo’s invoice approval software, you can create and customize an approval workflow that’s tailored to the specific needs of your organization.

Follow these steps to get started.

1. Create an Invoice Approval Workflow With the Workflow Wizard

You don’t need to hire a team of coders and wait through months of development time to automate your invoice approval process.

With frevvo’s workflow wizard, you can create your own custom workflows from scratch without any coding experience. Create new forms, add approval steps, and more with visual tools.

Here’s an example of how you can build your own workflow in frevvo:

Simply add the steps that reflect your invoice approval process, and frevvo will automatically generate a workflow in seconds. Alternatively, you can also install a pre-built template. 

Here are some of the pre-built templates available in frevvo:

Each template comes with a fully functional workflow and form, saving you both time and effort.

2. Customize the Form and Add Business Logic to Your Workflow

Once you’ve created a workflow (or installed a template), the next step is to customize the invoice approval form to fit your business requirements.

frevvo’s dynamic form builder includes simple drag-and-drop tools. Add text boxes, radio buttons, signature fields, and more to easily customize your form.

Here’s an example of an invoice approval form:

The example above is a standard invoice approval form. But you can also create forms for different types of invoices like:

• Credit invoices
• Debit invoices
• Proforma invoices
• Interim invoices

With the visual workflow designer, you can add conditional logic to your workflows. For example, you can add a rule that routes invoices above $10,000 to a senior executive.

Here’s an example of a workflow with a conditional rule:

Invoices that are below $10,000 are automatically routed to the finance department without requiring VP review. Adding rules to your workflows like the one above can improve their efficiency.

3. Integrate the Workflow to Your Accounting System

Once you approve and pay an invoice, there’s another important step — entering the data into your accounting system. However, doing this manually is time-consuming and prone to errors.

Ensure your records are always up to date by integrating your invoice approval workflow with your accounting systems. This not only saves time on manual data entry but also helps you maintain accurate records for compliance and auditing purposes.

4. Test Your Invoice Approval Workflow

Run your workflow through several tests before deploying it across your organization. Get feedback from your team and make any adjustments.

With frevvo, you can test your workflow to ensure everything works as designed. You can even preview how your forms will look on mobile devices like smartphones and tablets.

Here’s how mobile previews look in frevvo:

Once everything looks good, you can deploy your new workflow with a single click and start using it right away.

5. Measure and Improve Your Workflow

Creating an automated invoice approval workflow is just the beginning. Keep a close eye on metrics like cycle times and continue to make improvements.

Here are some of the reports you can generate in frevvo:

Making small improvements over time can help you speed up approvals and reduce processing costs even further.

Essential Features of an Invoice Management System

Choosing an invoice management system can be challenging. To help you make an informed decision, the following are essential features to look for. 

Let’s take a closer look.

Automatic Validations

Sending a form back due to missing or invalid data can be frustrating. 

Look for an invoice management system that has a form designer with automatic validation features. An example is creating a field that can validate data (e.g., valid email addresses in an email address field).

Conditional Logic

Some invoices may require additional approval before you can issue payment. For this reason, you’ll want an invoice management system that lets you add conditional logic.

Here’s an example of what frevvo’s Rule Builder Wizard looks like:

By following these steps, you can add all kinds of conditional logic to your workflows.

Digital Signatures

Chasing signatures for paper invoices can drastically slow down approvals. Manually signing documents means printing, signing, scanning, and uploading them back to forward to the next person – a tedious process at best. Further, if a manager is traveling or away from the office, approvals get held up until they return.

Look for a solution that lets users add digital signatures to an invoice from any device. That way, managers can approve and sign electronically from their mobile device at any time even if they are on the road.

Role-Based Access

Role-based access control is simply a must, as it allows you to grant varying levels of access to each user. It ensures that only authorized users can view and take actions on the workflow thereby protecting sensitive information. Using roles also makes it much easier when employees move to a different job, get promoted, or leave the company.

Here’s how you can set restrictions on your workflows in frevvo:

Notifications & Reminders

When a manager receives an invoice to review, you’ll want that person to receive a notification so they can take action right away.

A good invoice management system will let you customize these notifications and ensure that approvers have the information they need to approve invoices.

Further, the system should also have the ability to automatically send reminders if someone does not perform their tasks by a specified deadline or to reassign the task to a different user if the original assignee is on vacation. That way, invoices aren’t delayed and employees aren’t forced to chase down managers or supervisors to get approvals in time.

PDF Generation & Storage

You may wish to generate PDFs to keep hard copies of invoices or to send them to your vendors after you issue payment.

In frevvo, you can use the mapping feature to generate PDFs. Any signatures that are on your forms will also transfer to the PDF.

Typically, these PDF documents are then stored in an electronic document management (EDM) system, e.g. SharePoint or DocuWare. Ideally, your automation software should transmit the documents electronically to the EDM system along with the proper indexing without requiring any manual intervention. Users can then search for and retrieve invoice details at a later date from the EDM system.

Third-Party Integrations

Workflows are more powerful when you can connect them with your existing systems.

With frevvo’s invoice approval software, you can integrate your workflows with your accounting system and have the data update automatically. This reduces manual data entry and helps you maintain accurate records.

Built-In Mobility

Nowadays, more work takes place on the go. 

Look for an invoice management system that works on all devices. This will let your team review and approve invoices no matter where they are.

Reporting

To continue improving workflow efficiency, you need a tool that lets you view and track key metrics in real-time. This will help you measure the effectiveness of any changes you make.

Security/Compliance

Internal processes like invoice approvals contain sensitive data. 

When choosing any kind of software, it’s important to check their security policy first to ensure that your data is secure and they comply with all standards.  

Conclusion

Managing invoices may seem straightforward at first. But as your company starts to scale, you’ll need an invoice management system to help you manage approvals. 

With frevvo’s invoice approval software, you can create an approval workflow that fits your specific business requirements using visual tools.

Best of all, you can try a free 30-day trial here to test out the software for yourself.

The post How to Automate Invoice Management (And Why You Should) appeared first on frevvo Blog.

Not just that, but 16% of organizations admit that they experience fraud issues associated with manual accounts payable processes.

Rather than struggle with slow, error-prone AP workflows, companies switch to accounts payable automation solutions. 

They cut out mistakes, reduce processing costs, and build stronger supplier relationships.

Read on for some concrete accounts payable automation examples and learn why your company should implement accounts payable automation.

Want to skip ahead? Click here.

• What’s Accounts Payable Automation?
• Accounts Payable Automation Examples
• Why Switch to Accounts Payable Automation?
• How to Automate AP Processes

What’s Accounts Payable Automation?

The accounts payable process is the final part of the procure-to-pay cycle. 

The AP process begins when your company receives a vendor invoice and finishes after the invoice is paid and filed. During the AP process, invoices are checked against the purchase order and goods receipt, and any discrepancies are addressed.

The problem with manual AP processes is that not only are they slow, but there are also often errors in the invoice data. An invoice error means that the paper invoice has to be sent back to the supplier, delaying the process further.

Not only do 42% of business leaders agree that automation software can speed up repetitive, manual tasks, you’ll also find that the auto-validation capabilities of accounts payable software prevent errors from occurring. This leads to higher levels of accuracy and prevents error-related delays.

Plus, by automating the accounts payable process, you reduce the possibility of fraud.

Currently, one in five organizations experiences procurement fraud, while nearly 30% of firms experience accounting fraud.

(Image Source)

Automated accounts payable software reduces the chaos associated with your manual process. 

Fraudsters often take advantage of this disorganization to commit fraudulent acts. Since an AP automation solution centralizes all incoming invoices and internal approvals, this streamlines the process and cuts out the opportunity for fraud.

What’s more, AP automation software makes it easier to implement extra approval layers. With multiple levels of approval, fraudulent activity is easier to spot.

Accounts Payable Automation Examples

There are several examples of where you can automate activities in the accounts payable process.

Populate Forms with Invoice Data Automatically

Invoice processing can be a slow business when done manually. When invoices are received from the supplier, the accounts payable department has to manually enter data into the system to kick off the invoice approval process.

With automated invoice processes, you can connect your database to the workflow. That way, your digital forms automatically pull key data from your databases to reduce the need for manual data entry.

Automatically Validate Invoice Data

In a conventional manual process, if there are errors or discrepancies, the invoice is sent back to the supplier. This causes a delay.

With automated accounts payable software, digital forms automatically validate to ensure all invoice data is correct.

This prevents errors or discrepancies delaying the process.

Automate Invoice Approvals Processes

Invoices will often need to be approved by senior staff members. You may have a conditional approval process where invoices need to be approved by more than one staff member if a certain amount is exceeded.

With manual accounts payable processes, this requires staff to manually hand over paper invoices for approval. Not only does this increase the chances that paperwork will get lost, documentation often gets buried on a manager’s desk that’s piled up with paperwork, causing delays.

With an automated accounts payable solution, you can design complex workflows so digital forms automatically route through the appropriate approvers based on the information in the forms.

Approvers get an automated notification to let them know that an approval is pending. They’ll also be sent an automatic reminder if they fail to sign the document electronically. You can also set escalations so that if there’s a big delay in approval, documents are automatically passed to a secondary approver.

Communicate with Suppliers Automatically

If you’re handling invoices by hand, you’ll need to manually email your suppliers whenever there is an update to their payments. This step can be time-consuming and it’s easy to forget.

With automated AP software, automatic communications are forwarded to suppliers to keep them updated as to the approval status of their payments. An email lets them know that their invoice has been approved and that their payment is on the way.

Automate Record-Keeping

With manual accounts payable processes, record-keeping is done by hand. Documents are scanned into the system and staff are tasked with huge amounts of data entry.

These processes are prone to mistakes. Errors in the audit trail can cause compliance issues.

By automating AP processes, you can integrate your record-keeping systems with your automated AP software. All documentation automatically uploads to your record-keeping system to keep a complete, up-to-date audit trail.

Why Switch to Accounts Payable Automation?

If you still use a manual process to handle accounts payable, you’re likely running into a whole bunch of issues.

Over half of organizations agree that the process is inefficient, while a third admit that they suffer from lost or missing invoices, and 23% cite errors as a problem. 

Plus, a quarter of companies say that duplicate invoice issues plague their accounts payable department, while 37% agree that manual routing is a hindrance.

(Image Source)

There are also huge security issues involved with manual AP processes: 16% of firms report fraud issues, while a further 16% have run into compliance problems. 

AP automation can help put a stop to these glitches. Here’s how.

1. Prevent Payments Fraud

Over 80% of organizations have been a victim of payments fraud. 

While 61% of payments fraud cases are down to compromised business emails by external hackers, almost half of reported losses of $100 million or more were inside jobs.

(Image Source)

Unfortunately, internal fraud happens across all levels of the company. 34% of fraud is committed by middle management, 31% by operations employees, and 26% by senior management.

Accounts payable automation is crucial in the fight against fraud.

In fact, 30% of organizations strongly agree that AP automation reduces fraud.

While manual AP processes are easy to manipulate and hack, AP automation provides a digital audit trail that’s automatically validated. As calculations are automated, and data is validated, it’s tougher to manipulate invoices.

Plus, AP workflow automation software automatically routes documentation through as many approvers as necessary. Making it easier to authenticate documentation on multiple levels creates more opportunities for senior staff to spot fraudulent activity. 

2. Accelerate the Accounts Payable Workflow 

Manual AP processes are slow. Not only is manual data entry time-consuming, manual approvals mean paperwork needs to be taken to approvers in person. 

What’s more, there are often delays in the process. 

For one thing, errors in a paper invoice mean the paperwork has to be returned and resubmitted. Plus, busy approvers often leave paperwork buried at the bottom of inboxes, delaying approval processes.

Automated invoice processing significantly speeds up the workflow. 

In fact, AP automation can accelerate invoice processing time by 73%.

On top of this, 64% of organizations agree that AP approvals are quicker with automation.

It’s not just that automation cuts out repetitive tasks and reduces manual data entry. Automatic routing and approval notifications mean approvals get signed quicker, while automatic validation cuts out errors, removing the time spent on remedial work.

3. Reduce Errors in the Process

Manual AP processes are riddled with data entry errors, missing paperwork, duplicate invoices, and double payments. 

Errors result in late or incorrect payments, as well as extra expenses to remedy issues.  Inaccuracies in paperwork can also cause compliance problems.

Automation reduces errors by automatically validating data before it’s submitted. 

Thanks to this capability, 36% of organizations agree that automation leads to fewer exceptions and duplicates in the AP process.

What’s more, 30% of organizations say AP automation helps improve compliance.

4. Cut Back on Costs

Manual AP processes are costly.

Not only are they slow and cumbersome, requiring lots of staff and manual labor hours, they’re also error-prone. These errors lead to extra remedial costs. 

Plus, delays in the process often lead to late payment costs, which mean that companies miss out on an early payment discount.

On top of that, manual processes require overheads for processing, such as paper, printer ink, and filing system supplies.

Over half of organizations say that AP automation results in lower processing costs.

In fact, these costs are significantly lower — AP automation can lead to an 81% reduction in invoice processing costs.

By implementing an AP automation solution like frevvo your AP process is faster and more scalable, meaning you need to pay fewer staff to do the same work. 

On top of that, there are fewer remedial costs as data is automatically validated, cutting out mistakes.

Due to this, over a third of organizations say they experience fewer costs from late payments when using AP automation, while a quarter say automation makes it easier to capture the early payment discount.

5. Improve Supplier Relationships

As manual AP processes are slow, error-prone, and susceptible to frequent delays, they can compromise your supplier relationships.

Suppliers want fast payment, and you want your goods and services on time. 

When paperwork is accurate, and AP processes are swift, this is possible. Unfortunately, manual AP processes don’t lend themselves to doing this well.

By switching to intelligent automation solutions for accounts processes, you can initiate faster payments that execute on time. 

Plus, you’ll have a better audit trail for suppliers to increase transparency.

That’s why 28% of organizations agree that accounts payable workflow automation improves supplier relationships.

How to Automate AP Processes

There’s no need to keep struggling with manual AP processes. It’s simple to switch to frevvo’s no-code software to streamline your accounts payable system for faster, cheaper processing.

1. Pick a Pre-Built Accounts Payable Workflow Template

While you can build your own accounts payable workflow from scratch on frevvo, there’s also a library of pre-built templates to make the process easier.

Select the basic invoice approval if you have no need for conditional routing. 

If you need to route your invoice to extra approvers based on the amount in the invoice, select the conditional routing template.

2. Customize Your Accounts Payable Workflow

Next, customize your accounts payable workflow to route automatically based on your AP process.

You can add and remove steps in the process, as well as edit each stage to suit your internal policies.

For example, you can edit the messaging of the email sent to suppliers to let them know their invoice has been approved, and adjust the invoice amount required for conditional routing to a VP.

At this stage, you can assign approvers by role or individually. You can also set escalations that trigger when an approval hasn’t been attended to. 

3. Create AP Approval Forms

Create digital forms for your invoice approval process.

You can customize the template form using the drag-and-drop editor in the dynamic form builder, or you can create your own digital form from scratch.

When this form is connected to your SQL database via the Database Connector, it will automatically populate with key data to reduce manual data entry.

Don’t forget to add relevant instructions to each section of the form.

Adjust business rules to program the form’s dynamic behavior. For example, you can set the form to calculate payments automatically.

4. Generate Dynamic PDFs 

Create dynamic, editable PDFs from your forms or add your own templates.

These PDFs can be sent to your supplier automatically for record-keeping to ensure a complete, accurate audit trail.

You can also save these PDFs directly to your system. They’re especially useful if you’re using Google Apps for record-keeping.

5. Set Access Controls

Set access for your accounts payable workflow to prevent fraud.

By limiting access, you restrict who can edit data, providing a better level of accountability.

Use the Settings to adjust who can initiate and carry out the workflow, as well as who can edit and view submissions. You can also set access so that only certain people can edit the workflow and audit trail.

6. Integrate with Record-Keeping Software

Integrate your AP workflow with your accounting software to automate record-keeping. This ensures you have a complete, accurate audit trail at all times.

While your audit trail will automatically save to frevvo’s built-in repository, you can also integrate Google Apps, SharePoint, and many other financial systems.

Built-in insight reporting also helps you to keep track of payments and identify any common bottlenecks in the process.

Conclusion

There are plenty of accounts payable automation examples that model the benefits of automating your AP process. Why not switch over to take full advantage of these benefits?

With faster AP processing, lower costs, and fewer errors, AP automation helps you to build stronger supplier relationships and tackle fraud head-on.

Ready to try it yourself? Give frevvo a go — sign up for the free trial today.

The post Accounts Payable Automation Examples To Improve Your AP Process appeared first on frevvo Blog.

With all the technology solutions available today, core tasks including invoicing and expense management can be automated with relative ease, not only reducing inaccuracies and delays but freeing up your finance team to perform more useful – and interesting – work.

In order to thrive in today’s competitive business environment, businesses need to make concerted efforts to use their resources as efficiently as possible. Streamlining and optimizing finance processes is one of the most important investments a business can make to help ensure long-term sustainability.

In this article, we’ll discuss some of the ways you can make your financial processes smarter. We’ll explore: 

• Common accounting and finance process challenges,
• Finance process improvement tips, 
• Key finance processes that can benefit from automation, and
• How frevvo’s financial workflow software tool can help you to improve your finance processes.

Let’s dive in.

Common Accounting and Finance Process Challenges

Let’s look at some of the common challenges businesses experience with regards to accounting and financial processes.

Inefficient Processes

Outdated systems result in information silos that make finance processes more complex than they need to be. Inefficient reporting processes take a toll on productivity and cause members of the finance team undue stress. Moreover, subjecting intelligent and highly qualified finance professionals to tedious, repetitive manual work (e.g. data entry) not only encourages burnout but prevents them from applying their talents in more productive, strategic ways that could help grow your business.

Unclear Role Division

When the division of roles and responsibilities is not clear enough, employees do not know who is responsible for which tasks or who is responsible for which approval. This lack of clear ownership can result in redundancy or tasks going undone, which in turn leads to credibility and trust issues.

Fraud

Fraud is an ever-present threat that requires constant vigilance to prevent. In 2018, fraud resulted in $7 billion in corporate losses, according to the Association of Certified Fraud Examiners. Fraudulent billing information and murky manual accounts payable systems are the primary causes of fraud, with instances ranging from invoices that don’t match expenses to check tampering. Implementing a solid approval process that prevents individuals from signing off on particular invoices in isolation can foster the necessary visibility and oversight to prevent fraud.

Inability to Manage Information

Accounting involves mountains of information and documents, which can be overwhelming for many finance teams. Properly managing, storing, organizing and tracking all these documents can be challenging, particularly for businesses that use manual systems. Given that all these documents need to be easy to find again later to double-check the information and for audits – only adds to the challenge. In a recent Levvel Research survey, accounts payable staff reported “receiving invoices in paper format” and “misplacing invoices” as two of the biggest challenges they face.

Manual Data Entry Mistakes

Manual data entry is a highly inefficient process that not only takes a lot of time and resources but also results in errors, making the business vulnerable to serious financial repercussions. Simple mistakes can result in underpaid or overpaid invoices and a number of other errors that can cause trouble further down the road. 

Slow Approval Processing

Manual approval processes can result in a slow, complicated payment processing system, which can lead to late payments and purchase order delays. 

Slow payments can result in dissatisfied suppliers, which can lead to additional charges or even suspended accounts and even impact other vendors’ willingness to work with your company. 

Purchase order delays may result in projects running behind schedule and can even lead to delayed product rollouts, which can have far-reaching detrimental effects on a company’s reputation and even impact its stock price.  

Lack of Visibility

There’s an inevitable lack of visibility and oversight that comes with relying on paper invoices and other documents. It’s almost impossible for your accountant to know off the top of their head precisely when each invoice was issued, when/whether the payment was made, or whether the payment has cleared – particularly in larger organizations. Manually tracking and logging each stage of each account and communicating the status of the transaction to suppliers and other stakeholders requires a lot of admin, most of which could be automated.

Another drawback of a manual system is that the lack of oversight leads to lack of insight into trends in the business’s financial operations, such as data showing spend patterns, productivity levels and overall operational efficiency. However, with automated finance processes, it’s easy to analyze this data and generate reports which can help to set the course for the business going forward.  

Disappearing Documents

When there’s a backlog of documents waiting to be processed manually, it’s not uncommon for emails or paper documents to be temporarily misplaced or completely lost. For example, in businesses that lack efficient accounting workflows, lost invoices may result in the accounts payable department having to waste time contacting suppliers to request replacement invoices – and that’s only if they notice that the invoices are missing. If they don’t, you’ll be in the embarrassing situation of having to explain to your suppliers why you haven’t paid them. Moreover, missing invoices can result in an inconsistent paper trail at audit time.

The graph below by Levvel Research demonstrates how much time accounts payable staff are spending on average each week resolving accounts payable process issues.

What is Finance Process Improvement?

Finance process improvement involves making changes to your finance workflows to increase efficiency. Process improvements can be as simple as creating more formalized guidelines for employees to follow when completing tasks such as submitting expense claims. On the other hand, using technology to automate your finance processes can have a significant impact on consistency, speed and accuracy, making it easier to meet your business goals.

Now, let’s look at some tips to help you improve your finance processes. 

Finance Process Improvement Tips

Audit Your Existing Processes

In order to improve your finance processes, you first need to examine the strengths and weaknesses of the system(s) you currently have in place. Focus on identifying areas that can be made more efficient and cost-effective, and decide which issues you will tackle first. You’ll want to prioritize the areas that will deliver the most significant gains for your business first and roll out additional improvements over time.

Get Your Team Involved

It’s vital to get your team’s buy-in before making any major changes to your finance processes. Build support for the changes you wish to implement across your business, showing senior management and finance staff alike how the improvements will benefit them and make their jobs easier. 

Train and Develop Your Team

One way to improve your finance processes is to offer your team members some cross-functional training. This way, you can always have personnel on hand who are knowledgeable in at least the basic workings of your accounting software and finance workflows. Perhaps more importantly, teaching staff the correct processes and how they will benefit and free up time will make them more likely to comply. 

Set Clear Deadlines

Establishing mandatory deadlines can do wonders in terms of encouraging employees to turn financial documentation over in a timely manner. Team members are far more likely to submit expense claims and invoices on time if they know that payments will be delayed if they don’t submit them by the cutoff date. Setting up automated messaging reminding individuals to submit their documents can help enforce this, and dynamic forms with rules can help to ensure that they complete all the fields and submit all the supporting documentation required.

Increase Collaboration 

Finance teams don’t work in isolation; they’re often dependent on other divisions for data. Find ways to promote inter-departmental collaboration to ensure that information is submitted timeously. Breaking down silos between various parts of the organization can have a pronounced impact on efficiency. 

Automate Key Finance Processes

By automating aspects of your finance processes, you can significantly improve efficiency and reduce busywork. The easiest processes to improve tend to be the ones that are most labor-intensive to perform manually, which also tend to be the ones with the highest risk of error. Obviously, you also want to focus on processes that are actually performed fairly often so you maximize time savings. These often include routine tasks such as purchase orders, invoice approval, travel reimbursement, and other activities that people spend time on every single day.. 

Try to automate as many of these everyday tasks as possible, and be sure to customize the automation settings to ensure that the specific rules and controls for each individual process are followed.

As you break your core processes down into their smallest components, you’ll find that additional opportunities for automation present themselves.

Automate, Then Integrate

While automating various tasks that make up your finance processes is a great start, it’s important to make sure that the various parts of your system are communicating with each other and sharing information. For instance, if you’ve automated your accounts receivable process, make sure that the tool you used to do so is capable of interfacing with your other tools, such as your inventory management software. 

Most leading accounting and workflow automation software allows for easy integration with other business tools. For instance, frevvo’s APIs and connectors makes it easy to integrate web forms with SQL databases, document management systems and financial tools and applications.

Key Finance Processes That Can Benefit From Automation

Purchasing

Purchase requisitions and purchase orders (POs) play a key role in promoting efficient and transparent procurement processes. However, they can be difficult to coordinate manually, particularly if workflows aren’t clearly defined. Automating your procurement process simplifies the process considerably by allowing any authorized employee to complete a requisition form and route it to the procurement department for approval – or to a senior manager if the total cost exceeds a predetermined amount. Once approved, it’s easy to generate a PO and send it to the vendor. 

Invoicing and Accounts Receivable

Generating invoices and managing accounts receivable are vital to ensuring that revenue doesn’t dry up. However, these tasks can be terribly time-consuming and prone to errors when performed manually – even more so when various different teams are involved. Automating the issuing, tracking, and reconciling of invoices – as well as automated reminder notifications – can make the process much simpler and help ensure that you get paid on time.

Accounts Payable

Ensuring that your business is up to date on paying its invoices is another key task that’s ripe for automation. Confirming that an invoice is correct, sending it to the correct person for approval, processing the payment and recording the transaction can involve numerous steps and potential bottlenecks. 

This process can be streamlined and standardized significantly by automating tasks such as information capturing and approval routing, as well as sending timely reminders to the responsible parties. Following best practices for accounts payable automation makes accounts payable more transparent, which in turn reduces the likelihood of fraud. Moreover, your business may be able to save money by taking advantage of early payment discounts offered by many vendors by processing invoices as soon as they come in.

Tax Compliance 

Previously, most businesses needed the assistance of expensive tax specialists to determine their tax obligations. Now, with the help of accounting software, businesses can easily calculate how much tax they need to pay on each transaction. 

Travel Requests

Travel requests are another finance process that many organizations would benefit from automating. Using dynamic forms that pre-fill fields with known information, validate information such as dates and and enforce certain conditions such as maximum amounts, can save businesses a lot of time. Automation also makes it easy to route travel requests to the relevant manager, finance department and travel desk for approval and keep everyone updated about the status of the request.

Expense Management

Reconciling company expenditure is traditionally one of the more difficult and frustrating tasks for finance teams. Employees collecting receipts and completing expense reports that need to be reviewed and approved, reimbursements that need to be processed, and finance teams needing to chase down employees to ensure they submit their expense claims on time – it’s a nightmare for everyone involved. 

Implementing smart expense tracking tools that digitize the process and enabling workflow automation can make this process much less painful. Using a Google Maps API, frevvo’s automated expense approval software can even automatically calculate mileage reimbursements.

Use frevvo to Improve Your Finance Processes

While automation sounds great, you might think that it will be difficult and expensive to implement. Think again.

With frevvo’s easy-to-use financial and accounting automation software, you can upgrade your accounting processes and ditch all the Excel sheets. frevvo’s 100% visual workflow builder will make designing forms, configuring approval routing, and setting up rules a breeze – with zero coding and no reason to ask IT for help.

frevvo allows you to: 

• Customize processes to fit your specific needs
• Design your exact forms with ease
• Configure process routing visually
• Integrate with accounting systems
• Enable mobile apps
• Set up dynamic behavior without coding
• Track, analyze, and improve finance processes, and more.

Simply sign up for a free 30-day trial and start by installing a pre-built accounting workflow template. Modify the template to meet your business’s unique needs and don’t hesitate to ask for help if you need it!

The post How to Improve Finance Processes to Save Time & Money appeared first on frevvo Blog.

They rely on Excel spreadsheets, sending them from employee to employee to make updates and circulate those changes. They hold steadfast to manual approvals, which can take days, weeks, or months for a simple sign-off from busy executives. And they hold their breath waiting for the inevitable human error to create an accounting minefield.

Needless to say, all of this can hinder growth for companies. 

But accounting automation can open the door to a better reality.

Automating a variety of accounting and financial operations tasks will lead to smoother operations, saved time, and a better bottom line. In this article, we’ll break down the basics of accounting and financial automation, show which tasks should be automated immediately, and illustrate how to use frevvo to build a scalable financial operation for your growing business.

• What Is Accounting Process Automation?
• The Benefits of Accounting Automation
• 7 Accounting Tasks to Automate Immediately
• How to Automate Accounting Processes in 4 Easy Steps

What Is Accounting Process Automation?

Simply put, automation the accounting process involves using software to automate essential tasks related to finance and accounting. These tasks can include, but are not limited to, accounts reconciliation, updating financial records, and creating financial statements with minimal human intervention.

An article in Accounting Today, noted that it’s a near-certainty that most accounting tasks will eventually be automated — and that this development will be positive for accountants. 

“It actually will be machines that unlock an accountant’s ability to share their judgment, enriching their employment experience and perceived value within the organization,” the article notes. “No matter how proficient machines become in automating transactional accounting tasks, they will never come close to the abiding value of an accountant — his or her judgment.”

One important thing to note is that accounting process automation is close to, but distinct from robotic process automation (RPA). While RPA merely provides a temporary fix for aging, legacy systems, accounting process automation is generally about using software to overhaul arcane financial and record-keeping operations.

In other words, it’s about rethinking the entire accounting process and imagining it as a streamlined, automated system that works with as little human effort as possible.

Of course, that spells big savings — in both time and money — for any business that is currently using employee time to manually add, update, check, and process financial documents. 

Let’s look at the specific benefits.

The Benefits of Accounting Automation

There are numerous benefits associated with finance process automation. While it can’t — and shouldn’t — completely replace human workers, it can greatly assist them and free up their time for more high-value work.

Some of the benefits associated with finance process or accounting automation are better data integrity, since the potential for human error is lessened. A single mistake can be catastrophically expensive for a business, blowing up years of goodwill from the public.

Automation also leads to improved efficiency and speedier approvals — consider that while managers can approve a purchase order in two days, it might take higher-ups such as the chief financial officer upwards of a week. And it’s not just approvals that get faster. Automation can speed up customer payments, too.

Then there’s the improved visibility that automation offers. By this, we mean that automation can provide companies with a greater internal look at what’s working and what isn’t with their data.

Start to finish, accounting automation can remove the chance of costly mistakes by workers. 

From capturing accounting data to manipulating and interpreting it, accounting automation software can handle much of the grunt work. This doesn’t necessarily have to eliminate employees, as the automation can free up time for more high-level quantitative and qualitative analysis.

In time, automation could transform accounting, offering great benefits to the businesses and firms that incorporate it into their processes.

A piece by temporary staffing giant Robert Half noted that accounting automation could impact routine tasks, compliance, customer interaction, and strategy.

“It’s unlikely software or robotic finance professionals will completely replace humans any time soon,” the piece noted. “However, accountants who want to future-proof their careers will increasingly need to work with automated tools to deliver the best possible service.”

Robert Half

7 Accounting Tasks to Automate Immediately

With a basic understanding of accounting automation, here are seven processes for them to immediately consider automating.

1. Purchasing

When companies purchase goods or services, there’s generally a lot of paperwork involved from purchase orders to contracts to other forms. Purchase order automation can help make sure nothing gets lost and that all required forms in a procurement process go where they should.

Automating purchasing activities can give you the security and protection of multi-step AP processes, without the time and costs associated with manually reviewing and processing paperwork by multiple stakeholders.

2. Travel & Mileage Reimbursement

Companies can burn hundreds of hours per year simply filing, processing, and verifying minor operating expenses like travel and mileage reimbursements. This process isn’t just superfluous, but it’s harmful to productivity across the entire organization. 

With automation, employees can head into work trips with their travel pre-approved and reimbursement all set. There’s no quibbling with accounting or waiting weeks after the trip to get reimbursed for expenses.

3. Expense Reports

One thing that’s changed a ton in accounting in the past 10-15 years for a lot of companies has been the submission of expense reports. For eons, these reports were handwritten or printed-out spreadsheets from Microsoft Excel with stapled receipts, taken over on-foot to a company’s accounting department.

To be sure, many companies likely still handle expense report submission this way.

But in recent years, it’s also become possible for employees to automatically fill out and route expense reports. Better, they might not even have to submit receipts, since some software can integrate with payment platforms, capturing and storing transactional data.

Automated expense approval software not only saves the accounting department’s time, but it frees up the entire company from rote administrative work.

4. Accounts Payable

While more companies treat accounts payable like a necessary evil, the truth is that the AP department holds an enormous amount of power over the entire business operation. Without efficient AP processes that follow best practices, companies can lose favor with important vendors, rack up expensive fees, or just not receive important goods or services when they need them.

Automation can help companies know when supplies need to be ordered, payments need to be sent out, and invoices tracked.

5. Sales Order Process

With automation, companies can spell out every step of their sales order process, ensuring that nothing is left to chance and that orders go out on time, with everything in them, and at the right price.

6. Payroll

Why have an operations manager or human resources employee stumbling over payroll every pay period? This can become a nightmare for companies as they grow, consuming vast resources to assure everyone gets paid on time.

Automation lessens the payroll headache, notes one accountant, who writes, “As a fan of automation, I love services and features that allow me to put things on autopilot so things like payroll can be completed, handled digitally and ensure you won’t miss any important filings like 941 or a DE9.”

Automating employee payroll is a no-brainer for any organization spending time manually processing each pay period.

7. Monthly Closes

The monthly close process can bring a ton of stress and uncertainty for companies.

A recent survey from Docuware noted that 90% of respondents were under pressure to close their monthly financials quicker, with just 39% satisfied with their close process and an abysmal 28% of people trusting their month-end close numbers. Automating the monthly close process can ease frayed nerves while providing more accurate data for companies.

How to Automate Accounting Processes in 4 Easy Steps

The best kind of accounting automation software offers a range of different functionality, to tackle a variety of common issues. frevvo was built to help businesses of all types and sizes automate tedious tasks and workflows to streamline operations, trim overhead, and reduce errors. 

Accounting and financial automation is one of frevvo’s most common use cases.

frevvo’s financial process automation software makes it incredibly simple to build a complete custom automation workflow for your business. Starting with pre-built templates, you can quickly adjust the form fields, define the workflow routing, set any conditional parameters, and launch the process to your entire team — literally in minutes. 

Because frevvo uses a 100% visual workflow interface, there’s no coding required.

Let’s walk through the specific steps for creating your own accounting automation workflow.

Step 1: Select a Workflow Template to Begin

frevvo offers more than 30 workflow templates that span nearly every aspect of your business operations. This makes it easy to get started with the process, since most of the accounting automation tasks outlined in this article can be created by modifying one of our pre-built templates. 

In this case, let’s try automating expenses, since that workflow can be such a time sink for both the accounting team and the rest of the company. 

To find the one for expense reports, go into the template applications, select “Expense Report by Category,” and click the “Install” button.

This will create a basic Expense Report workflow that you can customize to fit your specific business needs.

2. Customize the Pre-Built Expense Report Form to Meet Your Needs

The expense report workflow template includes most of the fields that businesses generally collect when they process expense reports.

Where possible, form fields are auto-filled (e.g. employee name and email address are automatically filled in based on the logged in user).

Employees can add details about each expense, assign a category, define the amount, or any other fields that could be relevant. You can customize each of these fields in order to collect any specific categories or other data about each line item to align with your accounting needs.

With this basic form, employees can enter their information, attach receipts, and even electronically sign the submission. 

You can use the drag-and-drop editor to make changes to the form as needed. 

Step 3: Use the Workflow Designer to Set the Order for Approval

Sometimes expense reports are a matter of an employee submitting directly to accounting. 

Other times, the reports must go through a couple of channels of managers and executives. frevvo’s workflow designer gives users the power to delineate all the levels of approval. Simply drag and drop as needed.

By editing the workflow, you can add, remove or rearrange steps in the process as needed. At this stage, you want to include all possible steps that may be required to finalize the expense report. 

You can also specify what happens once the expense report has been approved and finalized. 

Next, we’ll add some rules to the workflow that route it to the right people under the right circumstances. 

Step 4: Use frevvo’s Visual Rule Builder to Add Business Logic Where Needed

Sometimes, conditional approval steps must be added at each step of the process for expense reports. Perhaps the chief financial officer must see an expense report only if it exceeds $10,000.

Use frevvo’s Visual Rule Builder to easily add in conditional logic where it’s needed. It’s 100% visual and so easy to use that anyone who knows how to use a spreadsheet can create business logic without writing JavaScript or any code whatsoever.

Once you’ve set up your rules, you’re ready to test and deploy. 

frevvo includes built-in portals so you can provide employees with a great looking, easy to use way to access all your accounting and other processes.

The portal automatically enforces access control, looks great, and works naturally on desktop computers as well as mobile devices.

Of course, if you prefer, you can also just send a link to the form to employees and they can begin using it right away!

Your customized expense report will automatically look great and work naturally on mobile devices. That means a manager or VP who’s traveling can approve from anywhere at any time. That speeds up reimbursements for employees and keeps them in sync with the status of the process. The best part – you have to do nothing. frevvo forms and workflows automatically support all mobile devices without coding.

Automation doesn’t end with a deployed process. To gain maximum efficiency, you need to track and optimize performance. Fortunately, frevvo includes a number of reports and analytics so you can find the bottlenecks in your workflows and optimize them to gain even more ROI from process automation.

With frevvo, you can automate a range of other accounting applications, including purchase order submission, sales order forms, and mileage reimbursement. Each workflow takes just a few simple steps to setup and deploy. 

Don’t wait any longer to eliminate these tedious and time-consuming tasks from your day. 

Try frevvo for free to see how easy it can be to automate your accounting in just an afternoon. 

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