AP Automation for SAP: Check. What’s Next?
If your organization has engaged in an accounts payable automation project, congratulations! AP automation is often the first opportunity that companies identify for process automation in SAP. It’s the low-hanging fruit, delivering a rapid return on investment and solving painful points in manual processes like invoice receiving, information matching, and exceptions and delays in processing.
Going beyond AP automation
AP automation is an easy starting point that immediately adds direct value to your SAP system and has indirect effects like happier employees (freed from rote, manual, mind-numbing tasks to do more meaningful work) and reduced errors that help protect against compliance issues.
But AP automation is just the first step in receiving maximum value from your SAP system. Not only can you capitalize on a single point of entry solution for all financial processes, but automating upstream and downstream from AP creates a continuous improvement revolution throughout all financial processes.
9 essential areas to automate in financial processes
Financial processes flow through vendors and suppliers to and from your company, and through clients and customers to and from your company. Throughout these workflows, process automation will result in significant ROI gains. Here are nine areas beyond AP you should consider automating next:
- Procurement and purchase requisition: How much of your organization’s purchasing is contracted? Experts estimate that 30-45 percent of indirect purchasing is not contracted, which results in much higher prices—around 35 percent—than contracted prices. Automating purchase requisition processing not only simplifies the process for those purchases currently being made under contract, but it can also improve user adoption and compliance to reduce those expensive non-contracted purchases.
- Order confirmations: This manual process usually takes place in the procurement department, where an incoming order confirmation indicates that the P.O. will be filled as requested. Later, the delivery note is manually compared to the purchase order and variances entered as credit notes into SAP, then manually approved. With automation, the order confirmation is automatically captured and matched against the PO and existing master data in SAP. Only confirmations with discrepancies are flagged for manual approval, and both automated and manually approved order confirmations have a complete audit trail.
- Delivery note processing: Like order confirmations, delivery notes, which arrive with shipments, are matched against purchase orders and used to create a goods receipt note (GRN). Imagine if you could digitally capture the delivery note information, transfer it to SAP and automatically compare with the warehouse delivery. Discrepancy? No problem. Workflows for resolution are automatically initiated before the GRN is posted.
- Payment approval: In a manual process, invoices are typically gathered in a document and circulated for approval. Information from this approval process is manually transferred to the payment proposal, then executed as a payment run in SAP. With automation, a workflow notifies approvers, then automatically transfers the information to the payment proposal. A history of the entire process is stored within SAP.
- Sales order processing: Within the order-to-cash cycle, the manual nature of sales order processing can create big risks for transcription errors. In an automated process, orders are automatically captured, regardless of format, and information such as stock availability, pricing, discounts and master data is checked and validated against SAP data. Discrepancies are moved into an automated workflow for resolution, and validated data is transferred to create a sales order and an order confirmation for the customer.
- Payment advice / remittance advice: Manually keying each invoice from the remittance advice into SAP is a time-consuming, labor-intensive process that results in high amounts of unallocated cash left on account, waiting to be posted to the appropriate invoice. With automation, the conversion of receivables to cash is more efficient, with automated data matched line by line in order to clear open invoices quickly and update the accounts receivable ledger daily.
- Master data management: Maintaining accurate master data records for vendors, customers, general ledger accounts, cost centers and profit centers is critical for continuous process improvement and customer satisfaction. Automating a master data management workflow for collecting and approving change requests not only makes the process simpler, but improves records accuracy and the downstream effect of starting with the right information.
- Financial close: At the end of each month, quarter, and year, accounting and finance teams must complete hundreds or even thousands of simple tasks that require a high level of manual interaction. Those error-prone and time-consuming reconciliation tasks can be automated with robotic process automation, a digital robotic workforce that can perform administrative work essential for financial reporting in less time with no mistakes, freeing your staff to perform the higher-value work of interpreting financial results
- Mobile apps: Last but not least! SAP Fiori apps can offer many advantages, technically but also from a business perspective, as it contributes to improving your organizations bottom lines. Some of the key benefits include a high employee productivity, an increased internal adoption and decreased training and support costs. Various verticals within your organization can benefit from the possibilities to streamline any processes that requires input from the company’s existing SAP environment.
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