Clarity is key
When it comes to financials, accuracy and reliability are a priority due to many reasons. Enterprises base many decisions – both strategic and operational – on the financials. If, due to process anomalies or hidden process weaknesses, financial data doesn’t provide a true and real overview of a company’s operations, any decision will be based on a distorted reality.
Therefore, Accounts Payable (AP) and Accounts Receivable (AR) are two extremely important processes within any company. Paying invoices that are legitimate and accurate and in turn sending out invoice and collecting cash is, basically, ensuring the accuracy of a company’s financial statements.
Especially AP is a very interesting case for Process Mining. Tracking each invoice and knowing the different processing paths an invoice can take through departments and various IT systems is a complex task. And as AP and the financials are often managed by an own department, the Accounts Payable department has many layers of policies, regulations, auditing, and “red tape” to ensure the accuracy of the financial reporting. Those have been necessary, as suppliers and vendors rely on the Accounts Payable departments to provide timely payments, and inefficiencies negatively impact those relationships, which will have a direct impact on your customers in the middle- and long run.
Many problems can arise within the AP process between the receipt and payment. By offering accuracy and mapping the entire process, Process Mining can address most of the challenges. Furthermore, Process Mining brings transparency into the reality and allows for clarity:
- Reduce manual intervention by improving the quality of the Master Data Management process
- Find out where and why invoicing is delayed
- Overview over automation and automation potential
That results intangible business benefits, e.g.
- Optimized on-time payments and reduced overdue fines
- Improved cash flow
- Reduced Discount losses
- Better relationship with suppliers and vendors
- Clear overview and better control over cash