Your Guide to P2P/AP Process Pre-Automation Fixes

In the realm of Procure-to-Pay (P2P) and Accounts Payable (AP), advancing digital transformation and automation is crucial for a successful shared services operation. However, it is essential to ensure that your processes are streamlined and efficient before pursuing automation. Drawing on our 10+ years of experience in Accounts Payable, we have identified five guiding principles for improving P2P and AP processes through our historical analyses and initiatives:

1. Standardize your processes

Before automating, it is crucial to have standardized procedures with minimized exceptions established. This means creating clear, consistent workflows, unified system landscapes, and policies for every aspect of P2P and AP. By doing so, we experienced a reduced risk of input and output errors. The most prominent examples of standardization we have dealt with are:

1. Unification of invoice-receiving systems via a single supplier portal,
2. Promoting and (to the extent possible) mandating e-invoice utilization,
3. Introducing systems and solutions that stimulate first-time pass (3WM) in supplier invoice processing.

2. Enhance data accuracy

Data accuracy is the backbone of any efficient P2P/AP process. Ensuring that all data entered into our systems is precise and up-to-date is an important prerequisite. This involves regular audits and checks to catch any discrepancies or errors. Accurate data not only improves the efficiency of our processes but also builds trust with suppliers and stakeholders. We found that input data quality improvement for a higher degree of automation is very crucial in the areas of:

1. Tax data match between invoice and orders & Enterprise Resource Planning (ERP) setup,
2. Purchase Order (PO) – Invoice data synchronization (e.g., quantity & price match),
3. Supplier master data alignment with received invoice data.
4. Our experience utilizing data mining capabilities has been positive and contributed to improving data quality.

3. Optimize supplier relationships

Strong relationships with your suppliers are key to a smooth P2P/AP process. We constantly work on improving communication and collaboration with our suppliers. An effective relationship with suppliers can embed increased automation and tackle pain points. The major aspects our teams had to consider in supplier relationship management for automation growth are:

1. Supplier acceptance and adoption of invoice submission solutions that enable automation,
2. Supplier awareness of invoice data accuracy and data synchronization with purchase orders.

4. Leverage technology for manual tasks

Considering and leveraging the full spectrum of ERP integrated technologies to automate manual and repetitive tasks is essential to setting up and maintaining a future-fit solution landscape. Based on our experience, the right mix of ERP or Purchasing/Invoicing System built automation, Robotic Process Automations (RPAs), and AI-supported solutions have been essential to set up our optimal technology framework for a maximized automation rate.

5. Continuous improvement and maintenance

Lastly, fostering a culture of continuous improvement and ensuring adequate maintenance of systems, data, and processes are both essential for higher automation. We have seen great returns on automation rates from establishing:

1. P2P upstream process improvement initiatives (e.g., 3-way match improvement via process mining),
2. Robust processes set up on RPA, data, and system maintenance,
3. A continuous exploration and investment in advanced technologies including AI.

By focusing on these five areas, Nokia Business Service P2P reached a 60% touchless invoice processing rate and is progressing towards an 80% rate, which is considered the upper limit for automation in our multi-region global presence.

In conclusion, the journey towards automation in P2P/AP processes is a multifaceted endeavour that requires careful planning and execution. Nokia Business Service's experience serves as a testament to the potential benefits of these strategies, paving the way for a more automated and efficient future.

Want to learn more? Join SSON for the upcoming AP Automation Virtual Summit! From tackling fraud to AI adoption, the summit will cover everything you need to know to level up your AP processes. Register today!