Processing supplier invoices is a difficult and thankless task. The Accounts Payable department is responsible for recording expenses and payments in the accounts, with all the incident resolution management that this entails, as well as issuing the accounts payable report.In many organizations, Accounts Payable is perceived as a necessary evil and this process is neglected in favor of other more "important" tasks.
There are also external factors that add complexity to a changing situation: changes in business practices (electronic invoices, using PDF), changes in regulation (tax legislation, immediate information supply (SII)).
As a consequence of this "oversight'' the provider invoice process is converted into a mere survivor that does not have the tools nor the necessary information to know the situation that it finds itself in.
Accounts payable report: Invoice Ageing
There are various types of reports designed to measure volumes, efficiencies, productivity, times....but there is one that more relevant in relation to the visibility and health of the process. It is something as simple and at the same time as complex as the ''Invoice Ageing''.
The aging status shows the age of invoices in process. In other words, it is an accounts payable report that indicates the current status of each invoice, how long it has been pending, and who is responsible for the task to be performed with the invoice. It is a matter of knowing, by time period, how many invoices are pending approval (and each of their approvers), how many are pending accounting allocation, how many are in exception (with each exception being broken down), how many are pending payment... it is information on volumes, times, and responsible parties.
Relevant Information from the accounts payable report
This accounts payable report answers a wide range of questions, providing highly relevant information.
- The current situation is worrying in relation to the number of invoices in the process?...with a little bit of history the organization can know if having 1000 invoices in a state of exception is normal and acceptable or if it is should be a cause for alarm.
- Having the majority of the invoices with an antiquity of more than 10 days is an indicator of a problem?...with the answer to this question, bottle necks can be detected and solutions to improve the situation can be implemented.
- Why does one department systematically have less pending invoices than others? Why, of all the companies in the organization, is there one that has less invoices in exception than others?...with this we can obtain information related to good practices that serve as a model for the rest.
This information should by using an invoice workflow tool which registers and tracks each one of the events in the history of the invoice, showing the individual sate of each one at any given time.
The fundamental idea behind the accounts payable report is to give visibility to those responsible for the area, and that visibility is very relevant information for adopting measures both to correct specific situations and to improve the process. This information will allow for precise control over the status of the process, immediately detecting anomalies and situations that require special action.
