Maximizing AP Efficiency: The Transformative Power of Business Rules

What are business rules?

At its core, a business rule is a statement or set of statements that dictate the behavior of a business process. They are nothing but logical conditional statements meant to guide decision-making, ensure consistency, and streamline processes. These rules are derived from legal policies, industry standards, or even organizational requirements and best practices. The concrete business logic within these rules also enables process automation, thereby saving businesses time and money.

Let's look at a simple example of a business rule. Imagine you have a customer service hotline for your product-based company. To handle customer inquiries efficiently, you set up a business rule that states:

"Any incoming call related to product inquiries should be automatically routed to the 'Product Support' department during business hours. If it's after hours, route the call to a voicemail system."

This simple business rule ensures that customer calls are directed to the right place and implementing automated call routing simplifies customer service by ensuring that product-related inquiries are promptly directed to the specialized 'Product Support' department. After business hours, the system intelligently routes calls to a voicemail system, capturing customer inquiries for timely follow-up. Significant benefits such as improved customer experience, efficiency, streamlined operations and better resource utilization can be achieved through this simple business rule.

Key benefits of business rules

Let's now look at the transformative role business rules play in the accounts payable function.

Business rules in AP

The Accounts payable process today is often fraught with inefficiencies primarily due to its manual and traditional nature. Data entry errors, lack of real-time visibility into invoice status, approval delays, and compliance issues make the traditional AP process highly inefficient. There is a need to revolutionize the accounts payable process and along with automation, a pivotal catalyst in this transformation lies in the strategic implementation of business rules. From invoice validation to payment approval workflows, business rules provide an intelligent framework to streamline the accounts payable process and drive enhanced accuracy, efficiency, transparency and regulatory compliance. Businesses have been known to reduce their invoice processing times by up to 70% through implementing business rules.

How business rules impact the efficiency of AP?

In short, business rules in AP bring consistency, efficiency, and adherence to organizational policies throughout the invoice processing lifecycle. But the impact they have on AP is much bigger than that. As business rules play a pivotal role in:

Policy Adherence

Ensuring invoices follow company policies, external regulations, and industry standards is seamlessly embedded into the automated workflow, promoting consistent compliance.

Dynamic Decision-Making

Business rules in the AP automation guide the algorithms to make informed choices during invoice processing based on predefined criteria, ensuring adaptability to varying scenarios. This improves the accuracy and relevance of the processed data and saves time.

Reduced Manual Interventions

The combination of business rules and automation significantly reduces the need for manual interventions in AP automation. Rules streamline processes, automating routine tasks and allowing finance teams to focus on strategic activities.

Enhanced Accuracy and Compliance

AP automation, guided by business rules, enhances accuracy in data extraction and validation. This, in turn, ensures compliance with predefined rules, minimizing errors and reducing the risk of non-compliance. They can pick up the right invoice data and verify its integrity and consistency with the master data.

Real-time Monitoring and Reporting

Business rules contribute to real-time monitoring and reporting capabilities in AP automation. Organizations can track the performance of algorithms, adherence to business rules, and overall health of the invoicing processes.

Streamlined Exception Handling

In scenarios where invoices deviate from standard procedures, business rules play a crucial role in defining exception handling processes. This ensures that anomalies are flagged, reviewed, and addressed according to predefined rules.

Improved Vendor Relationships

AP automation with business rules accelerates the invoice processing cycle, leading to faster payments and improved relationships with vendors. The automation of routine tasks also reduces the likelihood of delays and errors. This in turn enables you to negotiate better prices with your vendors.

Efficient Resource Utilization

By leveraging business rules in AP automation, organizations optimize resource utilization. Technology handles repetitive tasks, allowing human resources to focus on strategic decision-making and complex problem-solving.

Customization

Businesses can seamlessly customize and configure business rules with user-friendly interface, providing the flexibility to activate, deactivate, or customize pre-configured templates based on evolving operational needs, all without necessitating extensive system overhauls.

You can also assign priority levels to rules, to determine the sequence in which rules are applied to ensure proper order and execution. Business rules allow organizations to customize invoice processing workflows, aligning with company policies and regulatory requirements, thereby reducing template creation time.

These rules also facilitate quick adjustments for policy changes, like modifying approval thresholds. In tandem, the use of No Code/Low Code with Generative AI introduces user-friendly customization, enabling easy rule setup and modification. The integration of Generative AI helps with easy and efficient retrieval of data, as every user will have different requirements and queries.

Business rule configuration with InSITE

Applexus' InSITE, an AI-driven vendor invoice management solution, serves as a centralized platform for AP needs, offering over 100 inbuilt business rules for enhanced efficiency. With InSITE businesses benefit from configurable rules such as automated routing, SAP master data validation, exception handling, PO/non-PO matching, data enrichment, multi-level approvals, and customized fraud detection.

InSITE's Work area monitors invoices based on client-defined business rules, ensuring issues are addressed before further processing. Its blend of automation and customizable rules positions InSITE as an ideal solution for comprehensive and efficient invoice management.

How do business rules work in InSITE?

After the invoice data is captured by InSITE, business rules initiate checks, validations, and approvals; if discrepancies arise, alerts are triggered for users to address issues and ensure the invoice progresses smoothly. Users must resolve issues, especially high-priority or mandatory rules before the invoice can proceed for further processing in the system.

For example: Price and quantity variance above tolerance limit set by the customer is sensitive information for the AP team. Any variation in price/qty between invoice and purchase order/goods receipt is flagged by the business rule alert and cannot be bypassed by the user unless the issue is tracked and resolved.

And then there are some business rules with less criticality, which can be bypassed by the user.

For example: A description of the order is mentioned in the Purchase Order as well as the Invoice. This is less critical information which can be different in PO (Purchase Orders) & Invoice. The business rule alert configured for this variation has less criticality and can be easily bypassed by the user.

If the initially assigned user lacks the knowledge or authority to handle a business rule alert in the system, they can forward the invoice to users with the required expertise. The forwarded invoice maintains the business rule alert, ensuring the designated resolver is aware of the specific issue.

Once all issues are addressed, the validated invoice proceeds for further processing. Business rules play a crucial role in eliminating errors from manual interventions in invoice verification, enhancing the overall efficiency of the process.

In Summary

Business rules serve as the foundation for AP automation, offering the necessary flexibility and adaptability for organizations' unique needs. InSITE stands out as a holistic vendor invoice management solution, transforming AP processes with features that not only automate but also enhance transparency, efficiency, and cost savings.

With customizable business rules and much more, InSITE is positioned to lead the future of Accounts Payable through innovation and adaptability. If you are looking to revolutionize your AP system, InSITE by Applexus is your ticket to – saving time, cutting costs, and enhancing accuracy. Do check out Applexus InSITE for more information.