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Best Practices for Implementing Web Invoicing January,
Two Thoushand-three At the present time, no ISO standards exist for the implementation of a Web invoicing application. There are, however, a number of best practices that, while not officially documented, are widely recognized by those companies and their accounts payable (AP) departments who have implemented, or are planning to implement, Web invoicing. With increased emphasis on quality in the business world today, it is not uncommon to see companies working to achieve ISO certification. ISO is the International Organization for Standardization, a federation of 132 national standards bodies based in Geneva, Switzerland, that has created a series of quality management systems standards. What are standards? They are documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines or definitions of characteristics, to ensure that materials, products, processes and services are fit for their purpose. For example, the format of the credit cards, phone cards and "smart" cards that have become commonplace is derived from an ISO International Standard. At the present time, no ISO standards exist for the implementation of a Web invoicing application. There are, however, a number of best practices that, while not officially documented, are widely recognized by those companies and their accounts payable (AP) departments who have implemented, or are planning to implement, Web invoicing. Preparing for the Transition The New York City Housing Development Corporation (HDC) is a public benefit corporation dedicated to financing quality, affordable housing in New York City. The corporation finances approximately 74,000 housing units, has issued more than $3.7 billion in bonds and has about $3.4 billion in outstanding mortgages. Recently, HDC implemented an Extranet — a self-service Web application for its customers, the owners and managing agents of the housing units the corporation finances. “The imaging component allows our customers to see if we’ve paid a bill on their behalf, and they can get a copy of the bill right off the system,” explains T.J. Mignone, HDC’s chief information officer. “It makes dispute resolution a lot easier.” The next logical step, says Mignone, is to implement Web invoicing. HDC is in the early stages of planning for such a transition, but even so, Mignone acknowledges the importance of developing a game plan early on. “You have to determine why you’re doing this; what you want it to help you accomplish,” says Mignone. “Efficiency and productivity are the main reasons. And because everybody has their own unique way of doing things, you have to decide if you’re going to stick with the core product being offered to you — or do you need to make customizations to accommodate established business rules.” Mignone also stresses the importance of conducting test or pilot projects first. When HDC was preparing to launch its Extranet, it conducted pilots with several of its managing agents first. “You want to make certain the system is user friendly and then use a phased in approach, rolling it out to smaller portions of users at a time.” Battle Tested Those who have been through the wars agree with Mignone, and offer up some of their own experiences. Danielle Hewitt, CPA, founder and president of Invisible Accountant, a Web-based accounting and bookkeeping company, suggests that when you begin to consider a move to a Web invoicing application, start with the people you are familiar with. “The first thing I would do is call the company that is supporting the current accounting system and see if it offers a Web invoicing application,” says Hewitt. “If they don’t, the Internet is a good place to shop for different services. Either way, look for security, pricing and flexibility in terms of how the Web invoicing application integrates with your current system.” Next, remember there is a logical sequence to everything. After all, a building won’t remain standing very long if its foundation is suspect. With that in mind, when Merck & Company recently revamped its AP department, it rolled out its automation-enabling technology in stages: digital imaging of invoices, followed by electronic invoicing by vendors, and finally, electronic invoice approval by end users. “You can’t build a Web approval mechanism without first having access to the images,” explains Jim Hinrichs, Merck’s senior director of AP. “We needed to have [invoices in electronic form] as a foundation before we could implement the Web approval system.” Lastly, don’t underestimate the importance of training, for both AP staff and the end-user community. When the University of Pennsylvania recently moved its AP operations from a paper-based to web-based environment, training was too low on the priority list. “We originally thought it would be so simple that we offered optional demonstration- style training,” explains Stephen Stines, senior director of information technology and financial systems for the University. “We brought people into lecture halls, demonstrated the process, gave them a manual and hoped it would suffice. But if we had to do it again, we would do hands-on training for all end users.” The message
is clear: Web invoicing offers significant opportunities for AP departments to
streamline operations, reduce operating costs and eliminate the burden of paper
invoices. But it’s critical that the implementation be well thought out if
it is going to adequately address your needs. As HDC’s Mignone says, “You
don’t implement it just because it’s there.”
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