Accounts Payable (AP) Best Practices

Step 1: Go back to the beginning – just for a moment – and make sure you’re creating an electronic purchase order (PO) for every purchase

🗸 POs are the foundation of great AP processes

🗸 PO approval on the front-end of the purchasing process helps reduce time, effort and inaccuracy on the back-end

🗸 POs are the first step in automating the 3-way price match, setting the stage for accurate payment

Step 2: Have you maximized EDI capabilities with your vendors?

🗸 For your 3-way match, you’ll need electronic acknowledges or ship notices, or receipts created as packages are received by your organization, and electronic invoices

🗸 Make sure your vendors are able to provide both 855s (or 856s) and 810s to cover these requirements

🗸 With these 3 EDI documents, you’ve got what you need for a highly automated and accurate 3-way match to enable world-class AP processing, plus you’ll eliminate manual processes and keying errors

🗸 Matching helps you validate not just price, but also accurate quantities

Step 3: Fully leverage contract opportunities

🗸 Make sure all purchasing is driven through your approved product formulary, and of course, make sure those frequently-purchased items are all on contract

🗸 Standardizing your product formulary helps drive consistency of both price and quality

🗸 A robust product formulary means all incoming products are already identified and coded for processing

Step 4: If any vendors are still sending paper invoices, convert them immediately

🗸 If some selected vendors have no EDI capabilities, look into conversion services that will take paper documents and convert them to electronic

🗸 810s make matching, payment, and archiving easier and faster

🗸 Faster processing and payment helps you take advantage of available early payment discounts

Step 5: Don’t pay invoices without proper documentation

🗸 Receiving is a critical step to documenting incoming supplies, ensuring you’ve received the items about to get paid

🗸 Exception: There may be invoices for non-PO services; everything else should have a PO


Step 6: Use your new capabilities to check for price parity

🗸 With these processes in place, you’ve made it easier to look across your organization at price parity – are you paying the same price for the same item every time it’s ordered?

Step 7: Create a centralized location at the enterprise level for managing documentation

🗸 Have one place responsible for scanning and attaching quotes, packing slips and invoices

🗸 This helps support your internal audit processes

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