vCards are an essential component of an AP automation solution. We look at AP automation in terms of three main components:
- Invoice Receipt and Processing
- Coding, Approval and Workflow Software
- Vendor Payment Automation with vCards
1. Invoice Receipt and Processing
Receiving vendor invoices, be they in paper or electronic form, presents challenges to accounts payables departments. Vendor invoice formats vary from supplier to supplier. If you’re using a single email inbox (ie ap@xyzwidgets.com), a person has to monitor and review all incoming invoices. The invoices are then routed to the appropriate payables team member or manager to review. Sometimes vendors submit questions via this email inbox, which causes more issues.
By utilizing an AP automation partner, these invoices can be automatically recognized and OCR (optical character recognition) performed to pull out the header and footer elements of the invoice (Vendor Name, Invoice Number, Invoice Amount, Invoice Date, Due Date, etc.), while a human operator handles the exceptions. Invoices and their associated metadata are then routed electronically to the appropriate manager for processing. Non PO invoices like utility bills can be automatically approved and forwarded for review and payment.
The main reasons for using this first component of an Invoice to Payment solution is the lower cost per invoice versus handling them internally and the speed of getting invoices into the system for early pay discounts.
2. Coding, Approval and Workflow Software
Using a software solution for handling, reviewing, coding and approval is essential for a highly productive AP department. Software that integrates with your ERP or accounting platform is essential for validating things like PO number, vendor number and allowing two and three way invoice matching.
You should be allowed to set up business rules within the software. For example, non PO invoices go to one set of team members, or invoices above a dollar amount go to a manager. Relieving your team of the tedious and time-consuming work of routing and reviewing invoices, and allowing them to focus only on the exceptions, makes better use of a strained and precious resource … your people.
3. Vendor Payment Automation with vCards
The third leg of the triad, Vendor Payment Automation, lets you receive a rebate on your AP spend. We enroll vendors who already accept cards, and look for opportunities with other vendors who prefer ACH and paper checks. We use a gentle approach and no vendors ever feel forced to accept vCards. We can also stay away from vendors with whom you don’t want to contact about vCards.
You provide a vendor pay file either on a weekly or monthly basis and we perform the transactions. We can cut checks, make ACH payments and also perform the vCard payments. You will always have review and approval power before releasing vendor payments.
