The Heritage Foundation- Automating Accounts Payable

Problem Solved
The Heritage Foundation used to have a manual accounts payable process that was labor intensive. The organization was experiencing rapid growth and wanted to improve its A/P process without increasing overhead. In 2008 the Heritage Foundation determined that its best solution was to outsource A/P to a third party, in this case API Outsourcing, Inc. As a result, the Heritage Foundation experienced a 29 percent increase in A/P volume over the prior year. “We wanted to change the A/P role to be more analytical, and also wanted the ability to process more volume with a less manual approach,” said Mark J. Schreiber, Chief Accountant at the Heritage Foundation. To convince management of the need to change, and to agree to pay for the change, Schreiber and James Gabele, Accounts Payable Specialist, compiled a cost analysis based on prior years actual volume and future volume growth projections, and demonstrated in a comparison matrix the pros and cons associated with a move to an automated process versus keeping the same
manual process in-house. “We also highlighted the benefits users would gain through an automated process, such as a simple to use solution, a way to track expenses, and quicker response times on invoice questions,” said Schreiber. In addition, Schreiber and Gabele also demonstrated to colleagues the ease in archiving invoice images and all data electronically, plus the ability for invoice approval to be made off-site, and the reduction of potential
duplicate payments. “We are now more efficient in our processing time in capturing invoice data, we are more streamlined in the approval process, and we are now more analytical in our A/P function,” Schreiber said. “[Gabele] is now able to take on new roles and responsibilities in the department, while also alleviating the need for the organization to hire additional personnel for the A/P process.”

A/P advice
 Schreiber offers the following advice to improve your A/P processes:
• Do your research
• Project five to 10 years down the road to account for growth and change in your organization
• Determine how this project relates to your organization’s overall needs both
now and into the future
• When looking to renovate or improve upon an internal process, don’t be afraid to think of solutions outside your organization, and for the opportunity to reconstruct a process from the foundation up.

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