We saw the steps of exception management in the post https://faoblog.com/processes-ap-exception-management-steps/. Also, we had some more inputs from a guest post, https://faoblog.com/processes-ap-exception-management-steps-2/.

We would like to thank Mr. Radu Fotescu for his inputs. What he shared with us was a sequence of steps on knowledge management for the exception processes. This can be applied to multiple functions as well.

We now move on to two related functions of AP / P2P:

  • Payment Administration
  • Payment Processing

Payment administration for a client can comprise of multiple areas:

  • Managing policies – you may be asked by your client / parent to help draft payment policies, vendor terms, payment periodicities, share your best practices to improve payment administration, draft definition of limits and approver levels (though this part is normally done and approved by the core finance department, I have however helped clients to regulate the vendor payment terms). Also for large multi-national companies, definition of agreed foreign exchange rates and conversions will also play an important part.
  • Defining workflows – Once policies are defined, the workflows need to be defined. I(n the traditional environment, a bunch of papers used to be sent over from one person to another, however, this now operates over either intranet or an internet application, using scanned documents. You need to set up the application to define the document movement path, which will be based on geography, value of the payment needed, number of authorizers, last date of payment and more.

We will continue on this in the next post.

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