JUMPING THROUGH HOOPS WITH ACCOUNTS PAYABLE IN VISUAL ERP

Do you have any idea the hoops that Accounts Payable has to jump through to process a vendor invoice?  If it matches, all is good.  But what if it doesn’t?  Imagine this scenario: Accounts Payable selects the Purchase Order received in Visual and then begins the matching process of marrying the PO, invoice, and receipt. When AP compares the amounts to values from the supplier’s invoice the PO price doesn’t match – yikes.  Now it is back to purchasing …. Wait a minute. This is getting boring and we don’t want you to think that accountants are boring. Let’s illustrate the problem in a story:

Pamela is our Accounts Payable person. She sends the incorrect invoice to Bob, our buyer. In the email she asks “Your PO doesn’t match the invoice from the supplier.  What’s up?”. Under her breath Pamela mumbles a few choice words because this is more work for her.  Pamela has always been proactive so she records the invoice in Visual with a status of “logged”. She then enters a note about sending the invoice to Bob so she can keep track. And then she waits.  Meanwhile Bob, the buyer, has received the invoice and prints a copy.  It’s the end of the day, he decides to leave it for tomorrow.

The next day when Bob returns the invoice has now gotten buried under some other paperwork. Not known for his housekeeping skills, it is days before the invoice reappears.  When it does Bob throws his hands to his head and states one of the following comments:

  1. Gosh, the vendor got it wrong.  The price I put on the PO is based on the contract.  I have no idea why the vendor changed it. This is such a pain.  Now I have to talk to the vendor’s customer service department.
  2. I did exactly what Ernie, the engineer, asked.  He must have had some change orders he didn’t tell us about.  And Ernie is out of the office today. I won’t be able to get an answer until tomorrow, if I am lucky.
  3. Oh no.  I really messed up on this one.  I must have been having a bad day.

No matter how you cut it, everyone will have extra work to do.  Bob will need to have the receiving clerk return the PO at the wrong price so Bob can fix the PO, send back to the receiving clerk.  Or he will need to work it out with the vendor or engineering.  Pamela in payables is spending time tracking these invoices and following up with Bob.

Moral of this story – time and money are wasted by mismatched POs and invoices.

The estimated cost to process an AP invoice is anywhere from $11 to $40 dollars.  In our story, it easily took 5 or 10 times longer to process an inaccurate invoice.  Wow.  That one mistake can get pretty costly.

But what if the Accounts Payable invoice matched the purchase order?  Does that not sound like a wonderful world?  I can almost hear the angels singing.  Recently, I was exposed to a web portal, SourceDay, that works with Visual.  It almost worked like magic.  The SaaS application allows Visual to send the PO to the web portal for your vendors to review on 1 easy screen.  The vendor sees the POs to confirm quantities, prices and due dates.  If the vendor makes changes, the information automatically goes back to the buyer for his review and confirmation.  So ……. if the price was different they would have caught it up front.  And saved all that time and money.  I think SourceDay is onto something.

The characters in this story are purely fictional.  Any resemblance to any real people is purely coincidental … or are they?