Blog / AP Automation

AP Exception Handling & Reducing Exception Rates

The Exceptions Workload

Getting the highest percentage of straight-through processing when an invoice arrives is an admirable goal, considering that teams working in AP spend inordinate amounts of time on exception handling.

Not only are exceptions a challenge in terms of the time and effort involved, the number of exceptions your organization has is probably rising. That’s because more growth means more supplier invoices.

AP staff spend time interacting with various suppliers, tracking down missing information, calling approvers, and other administration related to clearing exceptions. And it’s not just a few minutes here and there – more like 15 minutes to an hour for just one invoice exception task.

Exceptions as a Symptom of Inefficient Procurement Practices

Ineffective procurement processes can prevent companies from processing invoices in a timely manner, get timely discounts, or negotiate more favorable terms with suppliers. This happens when companies:

  • Rely on error-prone manual processes for approving requisitions
  • Do not issue purchase orders for new orders
  • Lack processes to prevent over/under payments, duplicate payments, missed payments, and late payments
  • Don’t confirm if deliveries match to contracts
  • Fail to take advantage of volume rebates*———–

Resolving Exceptions Faster

Organizations that do follow best practices and take advantage of AP automation technologies reduce their exception rates.

In most companies accounts payable staff do not have the data or knowledge of the purchase to be able to clear exceptions. Where the AP staff member might not have the information at hand, Palette’s PO matching function isolates the problem that is preventing a proper match.

Palette’s automated purchase order matching is a shared central dashboard on desktop and mobile that shortens the approval cycle by matching invoices, internal or external purchase orders, and goods receipts.

Palette’s unique “cascading” matching system can handle matching against purchase orders at the header or line/row level. One invoice can contain items from multiple purchase orders, and one purchase order can be matched to multiple invoices, whether they have been delivered in part or in full.

Exceptions are flagged and put into an automated workflow for approvers to validate with one-click approval on mobile or desktop.

Find out more about Palette’s PO Matching functionality here.

*Deloitte – Strategies for Optimizing Your Accounts Payable

Print or share Publish date: 2019-06-08