We know it would be great if everything always matched up, but life doesn’t always work out that way – especially when it comes to invoices. There are often good reasons for small discrepancies, so instead of slowing down the process to do a manual fix, why not configure deviation tolerances that make sense for your business to keep invoices moving.
- Increase your automation to improve your touchless ratio
- To maximize automation, combine automatic coding with tolerance levels
How to setup business rules
Tolerances take less than a minute to setup, though it requires the “order based AP” role.
Business rules are defined at the company or supplier level to ensure the proper point of control. There are 5 types of deviations you can configure by amount or percentage:
- Header amount
- Line total
- Unit price and quantity
A few things you should think about
- Think about the best way to balance a higher level of automation vs losing the controls you have in place.
- If you have certain suppliers that are always having issues, check with procurement to see if there is an issue with the pricing or Unit of Measure setup. At the same time, you can investigate if the invoice format that needs to be changed, or if you just truly need to change tolerances for this supplier due to the nature of the goods or services they provide.
- Creating a business case for agreeing to, or changing, tolerance levels should take into account how much time you spend manually handling invoices, appropriate reasons for exceptions and what should be done if the tolerance levels are still not working.
Does this scenario sound familiar?
Diana work as the AP Manager for a large cosmetics brand. When her colleagues in Procurement order essential oils from their largest supplier for their world-renowned soap she often experience issues where the information on the PO and invoice don’t match – oils are sometimes billed in weight and other times in bottles - it seems like the item registry or price list isn’t updated with regards to units and item numbers, also minor price deviations are common.
Diana wants to increase automation and streamline the handling of these invoices by using both connection and deviation tolerances.
In addition, Diana performed an analysis that she shared with the Procurement department highlighting how much time in estimated AP FTEs are spent manually matching invoices that didn’t have the same Unit of Measure on the invoice and the PO. Together AP and Procurement agree to approach three suppliers that created most of these deviations asking them to create invoices with the correct UOM. If that doesn’t work, Procurement agrees to confirm the correct information is on the PO each time.
So why not investigate setting up Deviation Tolerances? It’s just one of many options in Medius AP Automation that allows you to:
- Stop wasting time on manual rote processes.
- Increase your touchless ratio with increased automation.