Challenges With Blanket PO Processing In Accounts Payable

Processing invoices tied to different types of Purchase Orders (POs) can be complex for Accounts Payable (AP) teams, especially when dealing with blanket POs. Unlike standard POs that have predefined line items, blanket POs often involve recurring purchases or variable quantities, making it difficult to match invoices accurately. Manual handling of these POs results in delayed approvals, increased errors, and higher operational costs.

To overcome these challenges, organizations need an intelligent solution that streamlines PO processing. AstuteAP automates invoice matching, enhances accuracy, and ensures compliance, allowing AP teams to manage both standard and blanket POs more efficiently.

The Challenges of Manual Invoice Processing

Accounts Payable (AP) teams in organizations that rely on manual invoice processing face several inefficiencies that impact cost, accuracy, and processing speed. According to industry research:

• High Processing Costs:
  The average cost to manually process a single invoice is approximately $15.
• Lengthy Processing Times:
  Manual invoice processing can take up to 14.6 days, delaying payments and straining supplier relationships.
• Error-Prone Data Entry:
  Up to 39% of manually processed invoices contain errors, leading to costly rework and inefficiencies.
• Manual Data Handling:
  68% of businesses still rely on manual invoice entry.

These challenges highlight the urgent need for automation. AstuteAP offers an AI-powered invoice automation solution that streamlines AP operations, especially for organizations using PeopleSoft.

Processing Different Types of POs in Accounts Payable

AP teams manage invoices linked to different types of Purchase Orders (POs). Each type requires a specific approach to ensure accurate processing and compliance with financial policies. AstuteAP enhances invoice automation by intelligently distinguishing between standard POs and blanket POs, ensuring precise processing and streamlined workflows.

1. Standard POs: Itemized Invoice Processing

For standard purchase orders (POs), invoices include detailed line items that must match the PO to ensure accuracy. AstuteAP automates this process by:

• Extracting Vendor ID, Name, and Address from the PO header.
• Pulling all active line items from the PO, including quantity, unit price, and line amount.
• Validating invoice amounts against PO details to minimize discrepancies.

With automated matching, AP teams can significantly reduce errors and manual intervention.

2. Blanket POs: Simplifying Complex Invoice Processing

Blanket POs present unique challenges in AP processing. These are used for recurring purchases or fluctuating quantities, making it difficult to match line items directly. Traditional manual processing often results in the following:

• Confusion in invoice matching due to missing or incomplete line item details.
• Delayed approvals as AP teams must manually verify invoice totals.
• Higher error rates from incorrect allocation of charges across departments or cost centers.

AstuteAP simplifies blanket PO processing by:

• Allowing users to choose whether to process all PO lines or summarize them into a single line item
• Automatically capture invoice subtotals and ensure accurate cost allocation.
• Displaying PO origin information helps AP teams follow the correct processing workflow.

3. Processing Logic for Different PO Origins

AstuteAP follows a structured approach based on PO origin codes:

• Standard POs (Ending in 'PO' - DPO, APO, LPO, MPO, VPO):
  Processes itemized invoices by pulling all active PO line items.
• Blanket POs (Ending in 'OA' - DOA, AOA, LOA, MOA, BOA):
  Initially processed as a single line item, but now includes all PO lines based on user feedback.
• Non-PO invoices:
  Routed through a separate workflow for manual approvals.

This structured approach minimizes errors, accelerates invoice processing, and enhances vendor relationships.

4. User Control Over PO Line Selection

AstuteAP empowers AP teams by allowing users to specify which PO lines should be used for voucher creation on an invoice-by-invoice basis. This feature ensures:

• Flexibility in Reconciliation: Select only relevant lines, reducing complexity.
• Elimination of Unnecessary Line Items: Avoid processing irrelevant data.
• More Efficient Voucher Creation: Create vouchers faster and with greater accuracy.

Benefits of Implementing AstuteAP for PO Processing

AstuteAP eliminates inefficiencies and reduces errors while driving cost savings and ensuring compliance. Key benefits include:

• Reduced Processing Costs:
  Automated data extraction and validation significantly cut AP costs.
• Faster Invoice Turnaround:
  Automated workflows shorten invoice processing time from weeks to days.
• Increased Accuracy:
  AI-powered PO data extraction minimizes errors in voucher creation.
• Improved Compliance:
  Automated validations ensure adherence to regulatory and internal policies.
• Scalability:
  Seamlessly handles increasing invoice volumes without requiring additional AP staff.

Conclusion

Processing different types of POs presents unique challenges for AP teams, especially when managing blanket POs that require flexible handling. AstuteAP automates and simplifies invoice matching, reduces errors, and ensures compliance. With intelligent PO-based invoice processing, customizable workflows, and seamless integration with PeopleSoft, organizations can optimize AP operations and improve financial agility.