How Multi-Location Businesses Can Get the Most out of AP Automation
by Jillian Straw
If your company processes invoices, Accounts Payable (AP) automation can provide time savings, efficiencies, and increased data accuracy. Whether you have only a few employees or hundreds, automating your invoice processing offers a wide range of benefits. However, particularly for companies that have complex operations like more than one location or more than one department, automation efficiencies can add up to some major benefits in operations. For retail, hospitality, food, and many other industries that process large numbers of invoices, AP automation can be a game changer.
Let’s examine how automated invoice processing can apply to your complex organization.
Replacing the Manual AP Process
Processing invoices and vendor payments by hand is challenging for any organization, but it can cause issues for multi-unit groups especially. If you have multiple locations, your accounting staff can’t be located everywhere. For many of these companies, Accounts Payable (AP), accounting, and other back office functions are centralized in one location.
Centralizing back office operations provides efficiencies, but it also requires a lot of detailed communication between multiple locations and the central office. Transferring data, invoices, priorities, and other details can lead to issues.
WHG Companies, a hospitality management company, found that their entire AP department process used to be very “old school”. Managers from 60+ locations had to bundle and “snail mail” invoices to the AP department every week for the accounting team to process. Depending on the location and number of invoices, the mail system took two to three weeks to arrive and be examined at the central office.
WHG was experiencing lost mail and other backups, which impacted timely vendor payments. “A lot of times, our team was getting emails and things from vendors saying, ‘why haven’t you paid us?’ Well, it’s because we still haven’t gotten your bills,” said Sarah Zuehlke, Senior Staff Accountant at WHG.
Engaging an AP automation solution with a customizable approvals system is another way to increase efficiency for the whole company. If your team is still using manual workflows, approvals may need to go through multiple different layers or people. The approval process can become bogged down when paper has to physically change hands.
The Club at Ravenna, a golf club and lifestyle community, is only one location, but the company contains many different departments. Coordinating between departments that had different hours and were physically spaced out across the property made invoice approvals difficult, according to Stephanie Liby, Accounting Manager at Ravenna.
Stephanie described the process before adopting AP automation, saying, “We’re not in the same space as the other managers. They have their jobs, they’re running around. It’s hard to get them to come to our office and approve these invoices. They all have different priorities.”
Overall, manually processing and approving invoices across departments or locations can lead to real issues that impact operations and the bottom line. Delayed invoice processing, lost documents, and long payment times can all burden vendor relationships. Departments or locations don’t have eyes on the same information at the same time, leading to inconsistencies. Finally, the cost of manual communication processes and tracking down information can take up a lot of valuable staff time. The Institute of Finance & Management estimates that automation reduces the average cost to process an invoice from $9.66 to $6.21.
Benefits of AP Automation for Complex Businesses
Complex companies that have multiple locations or departments can take advantage of new technology in AP automation to scale a new, efficient invoice process.
Easy Invoice Input
AP automation can significantly streamline the first step of the invoice process: collecting invoices and inputting into one system. With an invoice solution, far-flung managers and other staff can easily input invoices into a centralized dashboard. Each location can use whatever method works best for them, whether submitting PDFs, email attachments, direct Electronic Data interchange (EDI) info, or even taking photos of paper invoices.
Significantly, using an invoice processing system saves a digital copy of the original invoice in the centralized system, alongside the digitized, indexed invoice. This frees up far-flung teams from needing to mail invoices and prevents the AP team from needing to keep paper copies of invoices, but it also keeps open the possibility to reference the original document.
For organizations used to mailing in invoices to a central department, this software opens up new efficiencies. Sarah from WHG reported, “Now, I get a lot of good feedback from the managers, that Plate IQ is just amazing, because now they don’t ever have to go to the post office to drop off their bills each week”.
Centralized, Accessible Data
Once all invoice data and documents are in one centralized system, the AP automation software provides a central repository that everyone on the team can reference. Data is consistent across the organization, instead of being “siloed” in various departments.
With manual AP and paper records, location-level managers may not have been in the same place as the accounting department and unable to access data. Now, with a digitized system of record, managers can access their own data and use it to find insights, understand trends, or look up helpful historical information.
Especially for remote or partially remote teams, replacing a literal filing cabinet with a central repository (a “digital filing cabinet”) opens up new possibilities for productive, robust remote work.
Finally, as more business records move online, most organizations are looking toward some sort of digital solution for document storage. As long as your AP solution offers free long-term document storage, leveraging a centralized repository that is included in your AP solution allows your organization to save on costly document storage.
Streamlining Invoice Communications
For many teams, one of the reasons AP and invoice processing is time consuming is because there are always multiple different stakeholders. From vendors to managers to accounting staff to leadership, all may need to weigh in on an invoice at some point.
Keeping track of that information via email, text, or phone calls can be incredibly time consuming. However, with everyone working off of the same info through a centralized solution, team members are empowered to access data — frustration-free.
If a team member wants to know something, like the status of an invoice or who needs to give approval to a payment, they can just check the system. A centralized invoice system replaces the team “back-and-forth”.
Sarah from WHG Companies mentioned that her organization takes advantage of Plate IQ’s “flag invoice” feature to streamline communication. Users can check the system to see items that have been flagged, responses, resolutions, and other information. “I think we have one invoice right now that’s been kind of going back and forth between us, the manager, and the regional manager to get it figured out,” she said. “It’s nice to follow the full scope [in Plate IQ], and you don’t have to search through emails to see who responded and what they said.”
Splitting an Invoice Between Locations
Many multi-location organizations face one particular challenge in Accounts Payable: splitting invoices. Some items may be ordered through a central vendor, but the items themselves go to various locations.
A robust AP solution should have the capability to split an invoice between different locations or departments, according to custom rules and needs, while still maintaining the right General Ledger (GL) codes and records.
WHG took advantage of Plate IQ’s invoice splitting feature at some hotel restaurants, Sarah explained. The AP team used Plate IQ to split invoices to allocate different portions to different locations, saving WHG “a lot of time and manpower,” said Sarah.
Faster & More Secure Bill Pay
Finally, moving to an automated AP system and electronic bill pay can add major efficiencies to the last step of paying invoices.
Instead of your team stuffing envelopes and manually sending paper checks, you can pay invoices electronically through a centralized dashboard, using ACH, EDI, vendor portals, or even Plate IQ’s check-printing system. Faster bill payment benefits operations, improves vendor relationships, and can even lead to new savings if your organization takes advantage of early payment discounts.
In addition, features like corporate debit cards or virtual cards can be used across different locations. Corporate debit cards can be customized with different security controls, such as spending limits for each card. Your organization can also take advantage of virtual cards that generate a one-time-use card code that is tied to your bank account.
The various electronic payment options can help streamline your entire system and keep your operations secure — as well as provide opportunities to earn cash back. Thanks to your digital filing cabinet, and remote approvals and payment capabilities, you can enjoy increased security across all payment types.
Powering Growth and Scalability
With new efficiencies and processes, AP automation can help streamline even complex operations for multi-location or multi-department businesses.
If your business is still in the initial stages of growth and does not yet have multiple departments or locations, an automated AP solution can set you up for success. The system is scalable, growing with your organization as your needs change.
Regardless of the size of your business, if you process invoices, there are new efficiencies to be found with AP automation. Interested in finding an invoice processing and storage solution for your company? To see how the automated invoice process can work for your business, scroll down and request to see a demo of Plate IQ.
Jillian Straw writes for Plate IQ, covering technology in the hospitality industry from a background in restaurants and operations management.
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