Bottleneck to baseline: optimising accounts payable

1. The seven bottlenecks

1. Manual data entry. Keying from PDFs or paper causes typos, wrong tax amounts and rework.
2. Matching mismatches. Small differences between invoice, PO and goods received note hold up the queue.
3. Stalled approvals. Nobody is sure who approves, the approver is away, or nothing escalates.
4. Too many exceptions. Validation rules that are too strict, or missing altogether.
5. Coding non-PO invoices. Long email chains to find the GL code and cost centre.
6. Slow ERP posting. Approved invoices still need a batch upload or keying in twice.
7. Payment and reconciliation gaps. Missed payment runs, last-minute holds and duplicate payments.

2. What to measure first

Get a baseline before you choose software or redesign workflows. Two measures matter most:

• Cycle time by stage. Split it into receipt to approval, approval to posting, and posting to payment. If most of an invoice’s life is spent waiting for a manager, faster scanning won’t help much.
• Touchless rate. The share of invoices that go from arrival to ready-for-payment without anyone touching them.

3. Four ways to fix the flow

1. Simplify approvals. Remove any sign-off that adds delay without adding control, and fast-track low-risk recurring spend.
2. Automate capture and set sensible tolerances. Stop minor differences becoming full exceptions.
3. Give exceptions a clear route. Each type of problem goes to the person who can fix it.
4. Connect AP to your ERP. Approved transactions written straight back, with the ERP kept as the system of record.