Maximizing AP and AR Automation in JD Edwards

Accounts Payable (AP) and Accounts Receivable (AR) processes play a crucial role in the overall efficiency and profitability of a business. Optimizing these often  time-consuming processes can mean automating them, reducing manual error risks, and ensuring seamless operation.

In this blog, we'll explore the state of and best practices for AP/AR automation, focusing on the three-way match process, image processing, and various data processing options in JD Edwards (JDE).

AP and AR Automation Possibilities

AP is a critical component of a company's financial structure, representing the money a business owes to its suppliers and vendors for goods and services received on credit. It's essentially a liability on the balance sheet, reflecting the company's obligation to pay its outstanding debts. By automating this component, that liability is reduced, as are attendant costs and risk opportunities.

AR represents the outstanding invoices or money owed to a business by its customers or clients for goods or services provided on credit. It is the money that a company expects to receive in the future from its customers due to credit sales. Through AR automation, businesses can more accurately project and forecast their sales and billing cycles.

Three-Way Match and Image-Scan-Enabled Processes

A three-way match is a standard practice in accounting and procurement to ensure that a company pays only for the goods and services it has received and that the amounts match across different documents. The three-way match involves comparing purchase orders (PO), goods receipts, and invoices.

Exploring scan-enabled processes with image recognition technology allows for automatic data extraction from these various documents, which JDE can facilitate seamlessly. Various third-party options can be employed to perform image-scanning and data production, including Scanman, Tungsten, Bottleline, and ERP Suites, among others.

Via its Analytics and Business Intelligence Platform, powered by Oracle Cloud, ERP Suites Analytics has already leveraged image-based data extraction technology. To that end, Microsoft Intelligence and Oracle Cloud Infrastructure (OCI) can enhance AP automation as well. By leveraging machine learning tools and cloud integration, JDE Orchestrations can be employed to streamline the invoice entry process.

Evaluated Receipt

The evaluated receipt (ER) process is an automation unto itself. The ER is a payment triggered based on the evaluation and acceptance of the receipt of goods or services, without the need for a separate invoice – essentially, a self-invoicing procedure. An ER streamlines the payment process for goods and services received.

Voucher Match Automation

Automated AP workflows can help companies achieve dramatic reductions in invoice processing time. JDE offers innovative data processing options that reduce redundancy and time expended. These options include recurring vouchers, which eliminate the need to enter contracts twice. Voucher match automation further automates matching against open receipts, significantly reducing manual effort and improving accuracy. Likewise, by automating receipt matching, businesses can enhance accuracy and streamline their accounts receivables management.

Crucial Role of AP/AR Automation in Business Growth

As businesses grow and strive for efficiency, AP stands out as an area where costs can be controlled. Through automation, companies can plateau AP costs, ensuring they don't scale linearly with business expansion. This becomes particularly vital during mergers or acquisitions, where integrating AP departments seamlessly is a common challenge.

Efficiency, Accuracy, and Fraud Prevention  

Efficiency becomes the name of the game with AP/AR automation. The reduction in invoice processing time is just the tip of the iceberg. Evaluating receipts and implementing voucher match automation allows businesses to pay based on receipts and terms, minimizing manual intervention. Through these enhanced payment controls, including verification, and the appropriate checks and balances, the opportunity for fraud is reduced and/or altogether prevented.

Accuracy is paramount in financial processes. Human errors can be costly, leading to incorrect data and potentially damaging the bottom line. Automation not only minimizes errors but also enhances working capital management by keeping cash on hand longer. Spend Management Tools and Integrations

Enter spend management tools like Coupa, Tipalti, and Ariba, which seamlessly integrate into JDE, offering comprehensive solutions. These platforms not only automate processes but also provide visibility into transactions, reducing the manual workload significantly. Voucher match automation tools, for instance, sift through transactions, identifying patterns, and automating acceptance or adjustment, thereby enhancing accuracy and productivity.

Supplier Automation

Supplier automation emerges as a critical component of AP automation, offering benefits beyond cost reduction. Managing supplier master data efficiently can prevent downstream errors, catch fraudulent activities, and significantly enhance overall efficiency. Supplier self-service, self-invoicing, and advanced ship notice functionalities bring a new level of collaboration between businesses and their suppliers, streamlining processes further.

A Strategic Investment

As companies venture into AP/AR automation, several strategic considerations come to light. Integrating with platforms, embracing robotic process automation (RPA), and exploring electronic data interchange (EDI) are all part of the journey. However, it's crucial to strike a balance between automation and control, especially in scenarios like high-dollar invoice processing or off-shore data entry.

Security is a paramount concern, and whether through integration or scanning processes, automation offers more accurate and auditable approaches. Establishing internal controls and approval processes becomes more manageable with automated workflows, enhancing security measures.

Maximizing Your AP/AR Automation ROI

AP/AR automation has moved beyond the trend stage and is being established as a strategic investment that can reshape the financial landscape of businesses. By embracing the latest technologies, integrating with leading platforms, and mastering supplier automation, companies can achieve unprecedented efficiencies, accuracy, and cost savings.

If you find yourself struggling to maximize the ROI from your AP/AR automation efforts, it's time to act. ERP Suites and our team of expert advisors can help. We’d be happy to talk. The future of finance is automated, and the time to embrace it is now.