Invoice Workflow brings savings and efficiencies to accounts payable by matching invoices, POs, and items received
When accounts payable managers need to match invoices, POs, and goods received to determine whether an invoice should be paid or not, To-Increase Invoice Workflow for Microsoft Dynamics AX automates and simplifies this task along with all the other activities related to invoice approvals. Invoice matching combines with automated approvals and streamlined approver routings to help companies implement fast, reliable, and consistent invoice processing, saving time and expenses. Companies can take advantage of the flexibility of Invoice Workflow to set up their approval criteria, roles, and processes as they like.
Simple two-way and three-way matching within variances
In To-Increase Invoice Workflow, you have two main ways to match invoices to purchase orders and get to the invoice approval—two-way and three-way matching. Without the solution’s assistance, these steps would take a number of time-consuming, manual steps in Microsoft Dynamics AX and between accounts payable, procurement managers, and vendors. Together with automatic approvals and efficient approver routings, the matchings help companies achieve a fast ROI and remarkable process efficiencies with Invoice Workflow.
In two-way matching, you reconcile an invoice with a PO. If the invoice amount matches the PO amount, the invoice can be automatically approved, as we mentioned in our earlier post. If invoice and PO do not align, however, Invoice Workflow can match them within a certain, acceptable variance, typically a percentage of the total, which you set up beforehand. If the PO and invoice amounts match within the variance, the solution still moves the invoice along with an automatic approval. If still no match can be made because the discrepancy is too large, accounts payable can add a note to the invoice pointing out the issue and forward it to a procurement manager to resolve. The procurement manager then is at liberty to mark the invoice for approval and move it along in the process, or decline it, which would mean returning it to the vendor and discussing it.
When Invoice Workflow performs three-way matching, it reconciles an invoice, a PO, and the shipment received. For example, the PO may be for 10 items, the warehouse has received five of them, and the invoice bills for six. Invoice Workflow matches all three. Depending on a company’s practices and vendor agreements, this may be a common, unproblematic occurrence. As before, Invoice Workflow also aims to make a match within an acceptable variance. If a three-way match can be achieved within an established variance, invoice approval is automatic. If the variance exceeds a certain limit or this kind of invoicing above actual deliveries is not what accounts payable can accommodate, managers can make the appropriate notes in the invoice record and return it to the vendor with a request for correction or a new invoice.
Incorporating accounts payable preferences and best practices in Invoice Workflow
When approvers need to become involved when Invoice Workflow cannot establish a two-way or three-way match, they can approve within their procuration limits and authority. If they lack either one, they can redirect the approval task to another approver with an automatic note explaining the reason for forwarding it.
In managing Invoice Workflow to successfully produce two-way and three-way matches, companies find their own best practices in keeping processes moving and streamlined. Before expediting a purchase invoice into the process, accounts payable managers can also set a delay of a certain number of days to allow for the receipt of goods. That way, it’s more likely that Invoice Workflow can come up with a match that results in an automatic approval.
In preparing to use Invoice Workflow effectively, finance managers should think about how they want certain types of invoices to be forwarded and how they want the processes in Invoice Workflow to happen. In their planning, it also makes sense for them to consider the possible approver roles, including definitions of procuration limits, dimensions a person can approve, for which companies an approver can act, and the automatic sequence of approvers for escalation and forwarding.
Think Invoice Workflow can help you improve invoice approvals and processing, and save time and expense? We’ll be happy to give you a demo and answer any questions. Send me an email at mchapman [at] to-increase.com or contact To-Increase.