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AP Invoicing Assessment - Scorecard

Area
1. Receive/Prepare invoices 2. Process invoices 3. Approve invoices

Score 0 - 5
2

Gap
3

1 2
3

2 3 3
2

1. Receive/Prepare invoices

1.71

3.29

Score 0 - 5 2. Process invoices 2.25 2.75 Gap

3. Approve invoices

2.88

2.13

AP Invoicing Assessment - Gap Analysis


Gaps Gap 0-5 Importa nce Balanced 1-3 gap

Area

Leading Practice
Invoices centrally received in an accounts payable shared services center.

Client As-Is Process


- Corporate policy is to receive all invoices centrally - However, challenges exist around invoice reception - Corp. invoices are not centralized, about 30% of invoices - Freight invoices go to plants first (trafic dpt approve rate first) - Some vendors send electronic files via emails - The files are however printed and scanned - No use of EDI nor Portal

Technology

Process
1. Vendors use wrong mailing address (5%-8% of cases) 2. Sometimes vendor sent duplicates to plants

Organization

6
1. Non pdf files (TIFF) need to be manually opened and printed 2. There is a chance some invoices are not printed by Outlook. 3. No use of EDI nor Portal 1. Emails are a mix of invoices and non invoices documents 2. Emails are a mix of diferrent dpt documents

Invoices received electronically via a web portal or a file (EDI, XML, etc.).

1. Receive/Prepare invoices

4
Invoices faxed from vendors (versus received via e-mail). Non-PO invoices contain an internal contact name Only few faxes are sent by vendors. Not an issue.

3 1

12 0

0
Most of the times, they do. However, some vendors send invalid names.

1. Miscommunication between purchasing and vendors on contact name management (ex: agreement to send back documents if not up to date)

1
Contact info validated real-time on invoices received electronically via a web portal or a file (EDI, XML, etc.). Reduce vendor invoice volumes by leveraging 2-way match / invoiceless processing (ERS, pay upon receipt, self billing) for major suppliers N/A, no electronic reception.

1 1

1 5
1. Too many errors in the PO/GR steps: price list not maintained, vendors duplicates, payment terms handled by purchasing, tax values in the material master, etc., ) 1. gap between 80% potential and 2% 1. P-cards members are actual reluctant to use p-cards vs. closing PO 2. Perception is the p-card mean leads to lack of control

5
Not implemented.

5
Use of p-card is optimized (see p-card questionnaire for details) 450 p-cards are deployed across the company. Guidelines have been written and a minimum amount defined. However, only 2% of invoices went through p-cards in 2011 (vs. 80% of invoices below the threshold).

10

4
Scanning: 100% of invoices scanned Almost all invoices are scanned either by the client or by the third party. No gap. Scanning: Key invoice data read by optical character recognition Key fields are read by OCR but AP are facing (OCR) functionality. major challenges.

3 3

12 0
1. OCR is not leveraged for line items 2. The Barcode sticker allows Captiva to know when one invoice ends and when another begins 3. Captiva confuses the client barcode sticker with vendor barcode 4. More than 40 invoices per batch makes the error handling too complex in Captiva 5. How will this be handled for plants (1 batch per plant)? 6. Error in Captiva: PO# is already in use 7. Error in Captiva: EMC confused between barcodes 8. Need to restart EMC sever every Monday (affects other departments too)

4
2. Process invoices Imaging and drill down capabilities within ERP system provided view to employees. Only 1 dpt Employees have access to invoices in SAP for now but the collaboration group is working on a fix.

12
1. Archive Link broken for plants invoices (Plants cannot retrieve invoices from SAP). Users have to retrieve invoice in Documentum

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AP Invoicing Assessment - Gap Analysis


2. Process invoices

Gaps Gap 0-5 Importa nce Balanced 1-3 gap

Area

Leading Practice
All invoices processed in a single accounts payable system.

Client As-Is Process


All invoices are process in a single system but some challenges remain with PO invoices.

Technology
Issue for PO invoices: 1. AP spend too much time going back and forth between screens to have goods receipt indicator on the main edit/verification menu ZAPMM, along with vendor name and remit to address (change request approved) => 1 hour difference per 100 invoices) Need more info on the AP approval screen to make the process smooth 2. There is no visibility on whether the invoice was blocked. AP get to find out when the blocked report is published on Wednesday. Can ZLW101 (parked document report) be enabled to include?

Process

Organization

1
Tax automatically captured/calculated on invoices based on information from the PO. Tax amount is manually keyed based on information appearing on the vendor.

3
1. Tax is determined from the PO. Often (50%), the tax amount in SAP does not match the tax amount on the invoice. 1. SAP does not seem to correctly cancel 1. Delay between invoice date and mail the discount when overdue receipt date. 1. All service invoices are reviewed 2. if no cost center has been entered, the approval cannot be triggered and AP cannot re-route. The vendor (non PO invoice) or contact name (if mentioned on the invoice) must be contacted to determine the appropriate cost center How to determine cost center in the future when all invoices will be received in central location ? 3. No way for approvers to know the overall status in WF 4. No check vs. funding 5. Portal not working well

4
Establish date of receipt as the applicable date for discounts rather than the invoice date 100% of large dollar invoices reviewed and remaining invoices statistically sampled. Not implemented.

2 2

8 8

4
Non PO: All >$5000 is reviewed

3. Approve invoices

4
Matching issues are workflowed to the requistioner or receiving dock for quantity issues and to the purchasing agent for pricing issues. Both quantitiy and price issue are routed to the requisitioner (same with missing GR).

8
1. All service invoices are reviewed by 1. Approvers feel they lack AP training/documentation on how to handle line item matching issues (50% of invoices) 2. Approvers feel that workload got transferred from AP to plants => company decision but miscommunication ?

Eliminate approvals for stock goods

Leading practice is applied.

3 0

3 3

9 0

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