Vendor Invoice Management Best Practices
Before we get into the meat and potatoes, let’s take a look at the value that Vendor Invoice Management (VIM) provides.
OpenText’s VIM gives users the ability to approve invoices before they are created in the SAP database. This approval system is simple and allows for high amounts of customization with a multi-level approval approach. It is available for both PO and Non-PO based invoices. Multi-level approvals are supported by Non-PO natively. PO invoices however, only have one step approvals but are capable of multi-level approvals with the right customization. Approvals can be delayed by first sending it to VIM’s AP Processor. The approval process ends when the invoice is posted, deleted, or rejected.
Below are some key roles involved with the invoice approval process:
- A person responsible for entering the data
- A business user who requests the goods or services
- A person responsible for approving the invoices once they are sent
- A member of the AP team responsible for dealing with the invoices
Whether you are implementing Vendor Invoice Management (VIM) or are an existing customer, it is important to get the best value out of your investment.
Sounds obvious right?
Well, when implementing any new technology, it gives organizations the opportunity to review and optimize business efficiencies. Don’t invest in new technology and run your business as usual.
This is a trap that many fall into which results in poor adoption and fails to leverage the anticipated as well as the expected value of the product.
When considering and embarking on VIM solutions, it is important that good disciplines and best practices are adopted.
Take this as an opportunity to streamline your business process.
VIM handles both PO and Non-PO invoice processing, so identifying the respective workflow and approvals will be different.
But here’s the thing:
Reviewing your business invoice approval process is important. Understanding and implementing an efficient workflow is key.
VIM is configured to handle the approval and disposition of your invoices.
Organizations need to identify the roles required and the workflow for approvals:
- Identify business users assigned as stated above
- Set up the roles required
- Configure the work flow
- Configure the approval process
The basic workflow when utilizing VIM is a simple one.
The first step is to enter the invoice, whether that be through email, paper (Optical Character Recognition), or fax.
As soon as the invoice is entered by an end user, the invoice goes into the FIN system.
Once it enters the system, a workflow is created and you will be able to see that the invoice gets posted.
After the invoice is posted inside the system, the Accounts Payable team will be allowed to process the information.
Additional roles based on workflow can be added
Invoice routing and processing is highly configurable. Invoices can be held and routed dependent on approval hierarchy and invoice type. This automation allows for accurate, efficient processing of invoices that reduces payment time and labor efforts.
For non-PO invoices VIM leverages the Chart of Authority. It allows for the setup of approvals that may differ from PO generated invoices. For example, the requester may also be the user that enters the data.
Consider these best practices:
- Your organizational structure – the ability to create a smaller labor footprint is something that should be your main focus
- Simplified routing and approval workflows which will make your AP department happy
- Remote approvals to create quicker turnaround
- Invoice change controls allow for increased usability and customization
- Automated invoice processing and receiving so you have more time in the day to focus on important tasks
- Digitized invoices for capture in SAP for seamless integration
- Better financial business processes and controls allowing for upfront return on your time and investment
- Faster invoice processing that prevents financial penalties so your business won’t suffer from unintentional mistakes
- Financial reporting against invoice processing, approvals and completion for a more organized and complete view
OpenText provides an easily digestible piece of content that outlines ways to allow for more productivity with your VIM setup.
WHAT COMES NEXT
Auritas is geared with the data and content experts to help you at any phase of your project. If you have an SAP system and are interested in learning more about VIM, upgrading VIM, or how VIM can align with your roadmap, please contact us.
We welcome all questions and comments! So if you have anything specific that you’re wondering about you can also drop us a comment below.
If you’d like to view our on-demand webinar about VIM, click here.