In a recent study conducted by Invocus among 178 North American Accounts Payable (AP) professionals, a significant 23% identified non PO invoice processing as one of their most considerable pain points. This highlights a pervasive issue within the realm of accounts payable management. But what exactly are these troublesome non-PO invoices? Simply put, non-PO invoices are those that are received without an underlying Purchase Order (PO) being established prior to the procurement of goods or services.

Understanding Non PO Invoices

What Are Non PO Invoices?

Non-PO invoices are issued when goods or services are provided without a formal purchase order being created. In a typical procurement process, a purchase order is generated to formally request and authorize a purchase, detailing the items, quantities, prices, and terms. However, in cases of non-PO invoices, this vital step is skipped, leading to several complications for the accounts payable department.

Why Are Non PO Invoices Inevitable?

One might wonder if it is possible to eliminate non-PO invoices entirely. Although many organizations establish policies and procedures to prioritize PO-based purchasing, non-PO spending cannot be fully eradicated. Here are some compelling reasons for this:

1. Time and Resource Constraints: The process of generating a purchase order can be time-consuming and resource-intensive. This may discourage departments from going through the formal procurement process, especially for urgent purchases.
2. Time-Sensitive Purchases: Certain purchases are time-sensitive and require immediate action. In such cases, waiting for a purchase order may not be feasible.
3. Lack of Formal Supplier Processes: Many suppliers do not have formal processes in place for receiving and completing orders. This can lead to situations where non-PO invoices are the only option available.

Despite organizations’ best efforts to encourage PO usage, non PO invoices can only be minimized, not completely eliminated.

Learn More: Merlin for AP Automation Software

The Pain Points of Non PO Invoices for AP Departments

The Challenge of Missing Reference POs

One of the primary challenges associated with non-PO invoices is the absence of a reference purchase order. This can complicate the verification and approval processes within accounts payable. When non-PO invoices are received, AP coordinators often find themselves acting as intermediaries, needing to communicate with both the supplier and the internal department requesting the purchase to clarify details. This not only consumes valuable time but can also lead to errors and miscommunications.

Strategies for Tackling Non-PO Invoices

Fortunately, there are effective strategies that accounts payable teams can implement to address the challenges posed by non PO invoices. An intelligent and intuitive invoice workflow automation solution, such as Invocus, can significantly enhance the efficiency of AP processes. Here are some common problems faced and how Invocus can provide solutions:

Problem 1: Complicated Invoice Creation and Submission Process for Suppliers

Invocus Solution:

• Auto-Population of Fields: To streamline the non-PO invoice creation process, Invocus allows for the auto-population of various fields, reducing the time suppliers spend filling out invoices.
• Intelligent Web-Forms: Custom web-forms are designed specifically for non-PO invoices, ensuring all essential details are captured seamlessly.
• Conversion from Paper to e-Invoice: The solution facilitates the conversion of non-PO paper invoices into electronic format, making the entire process more efficient.

Problem 2: Difficulty in Verifying and Validating Non PO Invoices

Invocus Solution:

• Intelligent Predictions: Invocus uses advanced algorithms to provide intelligent predictions that simplify invoice validation, enabling AP staff to quickly assess and approve invoices.

Problem 3: Longer Cycle Time for Approving Non-PO Invoices

Invocus Solution:

• User-Friendly Workflow Configurator: Invocus offers a straightforward workflow configurator that allows AP teams to design workflows tailored to their specific needs.
• Dynamic Workflows: The system can accommodate various non-PO spending scenarios, ensuring that each invoice is routed appropriately.
• Mobile Access: With mobility features, approvers can quickly review and approve non-PO invoices from their mobile devices, speeding up the approval process.

Problem 4: Missed Discount Opportunities

Invocus Solution:

• Early Payment Discounts: By reducing the overall processing time for non-PO invoices, organizations can take advantage of early payment discount opportunities that they might otherwise miss.

Conclusion

In summary, non-PO invoices present significant challenges for accounts payable departments across various organizations. The absence of reference purchase orders complicates the invoice processing workflow, leading to increased cycle times and missed opportunities. However, by leveraging intelligent invoice workflow automation solutions like Invocus, organizations can effectively tackle these challenges.

An intelligent invoice workflow automation solution acts as a guide, ensuring that AP processes are streamlined and efficient. Rather than being blown about like tumbleweeds, invoices can be directed through the approval process with precision and speed, ensuring accountability and timely payments.

As the financial landscape continues to evolve, organizations that adopt advanced technologies to manage their accounts payable functions will gain a competitive edge. They will not only enhance their operational efficiency but also foster better supplier relationships, ultimately contributing to their bottom line.

For organizations looking to revolutionize their accounts payable processes and mitigate the risks associated with non PO invoices, exploring solutions like Invocus is essential. Book a demo with Zycus today to see how our automation solutions can transform your workflow!

Related Read:

1. Blog – How to Automate the 3-Way Invoice Matching Process
2. Blog – What is Invoice Approval Workflow?
3. Blog – Combat the perils of Non-PO invoices by Invoice Workflow Automation
4. White Paper – A CFO’s Guide to Procurement and Invoice Management Benchmarking
5. Research Report – Invoice Workflow Automation (IWA) Report
6. Solution: Al-powered Automated Invoice Matching Software
7. Solution: Accelerate Your Invoicing with Zycus’ Simplified e-Invoice Generation Solution
8. Solution: AI-Powered e-Invoicing Software
9. Solution: Electronic Invoice Capture Software