Eliminating Paper from the Payables Workflow

With the payables process, especially in the United States, paper remains the center of the payables workflow.  At the root of the problem? Paper invoices, sales orders, check requests, statements, and other payment demand documents that sellers in the Payables Community send to buyers.

Further, even where paper has been replaced with “paper equivalents” there still remains problems and dissatisfaction because of its limitations.

Problems Scale Quickly.

Paper presents many issues in the workflow, especially where multiple people must review the payable.

It starts with the seller, who suffers the cost of printing or writing the paper documents, and of delivering these to the buyer. Because delivery must be physical – postal or interoffice transmittal –  there are costs as well as delays, often measured in days.  There is also the chance documents get lost during on their journey.

The problems continue for the buyer.  At a minimum, the buyer’s AP department must enter the data from the paper document over into their payables system.  This takes time, has potential for error, and it a flat out duplication of effort.

Many workflows require people outside the AP department to review or approve the document.  Once again, this requires physical delivery, with the same problems with cost, time, and potential to lose documents.

Then there is the problem of recording the review and approval results from those who review the document.  With paper documents, often reviewers record this by writing on the document, the envelope  or attaching a separate note.  This results in inconsistent, and often missing, review that makes the approval process difficult.

Lastly, while the document is out for review, it’s difficult for the AP department to track where the document is within the approval routing.

Paper Equivalents? Not So Fast!

Over the years automated systems introduced paper equivalents such as the Adobe Portable Document Format or “PDF” files, or electronic image files created from scanning paper.  While paper equivalents reduce the amount of paper and solved some of the problems of paper, they leave unaddressed most of the problems of paper.

Move Data. Not Paper.

A better approach is moving data through the workflow – never converting it into paper or paper equivalents.  Applications throughout the workflow can render this data so people can view it in practical manner.

Consider that virtually all payment demands or “payables” begin as a transaction in the seller’s receivables system; the payable begins its life as data.  Next, consider that the payables ends as a transaction in buyer’s payables system; it ends its life as data.

So, it’s unfortunate that a payable ever becomes paper or a paper equivalent.

Moving the payable as data means there is no cost or time for delivering it to the people in the workflow.  Through its journey, it can be tracked, so there is no longer a mystery where the payable is within its approval.  It’s virtually impossible to be lost; it can be replaced instantly.  Reviewers record their approval feedback as data that becomes part of the payable.

A Better Experience for Each Person in the Workflow.

An advantage of moving a payable through its workflow as data is this allows various applications in the workflow render this data in a fashion optimized for the task.  By applying workflow engineering principals, the application can present to the reviewer the data organized in a way to make this person’s task easier, faster, and more effective.  My post on Human Centered Design and User Experience delves more into this idea to illustrate the advantage of payables as data instead of paper.