Aeries Technology

Revolutionizing Accounts Payable Process through Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP) is revolutionizing the accounts payable process | Aeries Technology

Automated account payable (AP) process and Enterprise Resource Planning (ERP) system are the core of any company. Without these, companies rely heavily on manual tasks such as manual data entry, invoice processing, and payment processing leading to inefficiencies, errors, and delays in the AP workflow.  A leading company in the health information management (HIM) transcription and Electronic Health Record (EHR) service business found itself grappling with significant challenges in its accounts payable (AP) process. Due to the suboptimal utilization of the existing ERP system, the company faced inefficiencies, process gaps, and a lack of internal controls.  The company sought to introduce automation and optimize its AP workflow. 

Client’s challenge

The manual process followed by the client resulted in repetitive tasks, consuming valuable time and resources. The lack of automation created process gaps, inconsistency, and inaccurate records.

 The client wanted a strategic partner to understand the existing processes and modernize its AP workflow. Client was seeking a solution that would introduce accounts payable automation to streamline its manual processes. Recognizing the need for a transformative approach, the client turned to Aeries’s specialized team, which brought two decades of experience to the challenge.

Aeries’ Solution

Aeries conducted a comprehensive analysis of the workflows and challenges faced in the Accounts Payable (AP) process. Based on these findings, the team proposed a combination of system improvements and process changes. The system improvements focused on optimizing the existing ERP system, Microsoft Dynamics 365, while the process improvements aimed to transform the way the AP process was executed.

System Improvement changes

  • Aeries team worked to include Financial Planning & Analysis (FP&A) in the approval workflow to ensure financial transactions such as expense codes are error-free and facilitate accurate comparison between actual costs v/s budget.
  • Further, the team included the non-purchase orders (PO) based invoices as part of the ERP approval workflow to avoid the risk of approving invoices without attaching the necessary approval email copy. This process ensured that all invoices, including those not associated with a specific purchase order, go through the proper approval process and are appropriately documented, reducing the chances of unauthorized or incorrect payments.
  • Aeries team enhanced the ERP system by including additional fields such as lower tax deduction rates and payments on hold. The lower tax deduction rates field allowed for the application of reduced tax rates, if applicable, during financial calculations. Payments on hold helped in tracking and managing payments that are temporarily withheld or placed on hold for several reasons, enabling better financial control and transparency within the system.
  • Aeries team utilized the ERP system for 1099 compliance and reporting purposes. Then, the system was configured to capture and generate documentation and reports required for compliance with Internal Revenue Services (IRS) regulations of 1099 forms.

Process Improvement Changes

  • Aeries team cleaned up the vendor master data and updated the payment terms to prevent duplicate payment errors during the payment process.
  • Aeries team worked on strengthening the vendor onboarding process to mitigate any financial risks, ensure compliance, enhance vendor relationships, and optimize its supply chain operations.
  • ERP reports were customized for improved analytics resulting in lowering risk of overdue payments and maintain a positive relationship with suppliers.
  • Aeries also implemented sending remittance advice to vendors that enhanced transparency, facilitated accurate payment reconciliation, and strengthened the client’s relationship with its vendors.

Below is a representation of the transformation changes that Aeries suggested in the AP process:

Process Flow

Aeries Technology- Process Flow

Results

Aeries’ Results

Conclusion

Aeries successful transformation of the client’s Accounts Payable (AP) process through their Finance and Accounting Transformation Services revolutionized their operations and delivered remarkable outcomes. Aeries’ strategic expertise enabled the client to embrace digital and automated processes, thus fostering growth and providing significant value to their stakeholders.