By Jeff Chandler – Shared Service Expert for Prodagio Software, over 25 years AP experience working as the AP manager for Altria and Kraft Foods.
As accounts payable professionals we know the many reasons that prompt our vendors to call or email our AP departments so persistently. For one, and probably the most obvious, they want to know if they will be paid on time (or paid at all in some cases). Often they want to discuss short payments as well; however I’m sure many of you have seen vendors who just want to “babysit” their invoices. They ask, “Did you receive my invoice?”, or “at what stage is my invoice in your process”? For many AP staffs those kinds of calls or inquiries are more annoyances to us than relevant.
In my AP experience we were strapped with a process that, unfortunately, involved a very high invoice exception rate (low first pass success rate). Enduring a high exception rate in our AP process meant extended invoice processing times. Extended processing times ultimately prompted many of our vendors to “reach out and touch” (like the telephone commercials back in the day) us as they looked for answers regarding their invoice status.
Vendor self service portals seem to be the obvious answer for many companies. Portals can provide a means for vendors to check on, or “babysit” their invoices to their hearts content without having to involve your AP staff. Vendor self service portals seem to work best when centralization has already taken place. In a centralized environment, where invoices flow from the vendor direct to your AP shop (instead of being sent to the vendors contact in the field), as soon as the invoice is received and ingested (scanned, indexed) they are accessible in the vendor portal. At that time the vendor can begin their inquiries and follow the invoice through the process if they wish.
Vendor portals should include the aforementioned inquiry capability but also your payment information such as check number and check date, and a way for the vendor to communicate back to you and ask questions if the provided electronic information doesn’t satisfy them. They could even initialize a dispute with you if need be. In more advanced scenarios many companies allow electronic submission of vendor invoices via the portal, and also “purchase order flip” (flipping the PO you provided to them into an invoice, assuming all requirements were met).
I think one can quickly see from that brief description the apparent benefits of supporting a vendor self service portal. There are cost savings to be had for your AP department, and depending on your vendors preferences they could even realize cost savings as well, such as reduced postage savings. I see no reason why any Controller or AP manager wouldn’t want to pursue having a vendor self service portal. Obviously there are safeguards that need to be in place to ensure that your site is technologically safe and secure.
But wait, I see a potential stumbling block – invoice exceptions! The vendor, in their constant invoice babysitting mode, can get frustrated when they don’t see positive payment status in the portal. Next thing you know they are sending you communiqués via the portal and when they get no satisfaction their only recourse is to go back to the telephone or email. At one company where I used to work we toyed with the idea of adding a message, when processing times were extended due to exceptions (such as a price difference between invoice and PO), for the vendor to call their contact at our company. As far as I know we only threatened and never instituted that practice for fear of a rebellion by the procurement organization. Even with the mountain of invoice exceptions to overcome the overall value of a vendor portal easily outweighs not having one. You should experience a very healthy drop in the number of interactions with the vendors (inquiries such as phone and email) thru the use of the portal.
As I close, I hope that you can move to providing a vendor self service portal in your AP process if you haven’t already. The benefits are ripe for the picking!