Conundrum

Handling municipal bills efficiently. It's often a game of "who has the invoice?"

"Did we really need 13 silver shovels for that groundbreaking?" "This labor charge seems high." "I thought we paid this bill a month ago."

Each question is a legitimate reason NOT to sign off on a payment to a vendor. It's also one of the main reasons for delays in paying the municipality's bills.

If a busy payment approver has a question, the initial response is usually to stop working on the payment order until the invoice can be reviewed.

The initial delay is often compounded with additional expenditures of time and manpower to locate the invoice, which may be sitting in a file cabinet in another department or in the inbox of another approver. And what if that person hasn't finished with it? What if the invoice is lost?

In small towns and villages, the effect of invoice-related delays on productivity in accounts payable might be manageable. In larger municipalities, it can be a rampant problem that is counterproductive for everyone, including municipal staff and vendors. It can ultimately have a negative impact on the municipality's credit rating.

Conventional Solution

In some busy municipalities, the originals of unpaid invoices are placed in a central file in the accounts payable department as soon after they arrive as possible. If the invoice arrives at the police department, for example, the original is sent to the central file in accounts payable as soon as it has been approved there. The police department keeps a copy.

As the payment order proceeds through the approval process, anyone wanting to see the invoice is required to sign it out. This way, accounts payable managers always know where there might be a log jam.

The approach does not eliminate the manpower drain associated with handling the invoices. It does make the process significantly more manageable, however.

21st Century Solution

The accounts payable department of a medium-sized midwestern city has eliminated the potential for delays associated with searching for invoices and is seeing exceptional productivity gains as a result.

Their solution was to digitize the invoices and make them available to payment approvers on demand. In practical terms, they began to scan their invoices into a document imaging system from Laserfiche and integrated it with their accounting program.

"We had a major investment in putting our accounts payable operations on computer," explains the city's assistant director of finance who oversees accounts payable operations. "But we were seeing that the need to review invoices, which were still on paper at the time, was keeping us from getting the full return on our investment.

"Now, as the necessary information from the invoice is keyed into our accounting system, the clerk immediately scans the invoice into Laserfiche. With one mouse click, the accounting system sends identifying information to the indexing template for the invoice.

"The invoice is then instantly available to approvers as they review payment orders. It doesn't matter if every approver wants to see the same invoice at the same time. The image of the invoice is always available.

"Naturally, there are times when there really is a problem with an invoice that requires further investigation. On the whole, however, this integration is enabling us to handle our bills significantly more efficiently than ever before."

The city is handling the vast majority of the more than 3,000 invoices it receives each week in this manner. Every municipal department, including the city-owned airport is scheduled to be on the system by the end of this year.

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To learn more about this issue, please visit these links:

Click here http://www.Laserfiche.com/newsroom/kennedycoe.html to read about how invoices are dealt with in another type of finance organization.

Attending workshops are great ways to learn about electronic document imaging, just ask this Finance Director http://www.Laserfiche.com/newsroom/boone.html

IOMA, the Institute of Management and Administration, offers information to help readers enhance their organization’s financial performance. Along with publications and products, IOMA holds an annual conference and expo. Read more about it at http://www.ioma.com/products/conferences.php?confid=18

The State of Nevada did a survey on the cost of losing a document. Read more about it at http://www.Laserfiche.com/newsroom/accuf1.html

International Accounts Payable Professionals, Inc. is dedicated to providing its members with all the necessary resources to succeed in the ever-changing payables environment. View their website at http://www.iappnet.org/index.cfm

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