What pieces of data does AP maintain? How does AP maintain all of these bits and pieces? They include such areas as: Vendor details, documentation, and contracts; purchase orders, returns, and credits; corporate credit cards, bonuses, and legal fees. I’m sure you can all think of more!!
Accounts Payable owns a lot of different data depending on what kind of company they are part of and what kind of function AP is for the business. You can get creative when thinking about your structure, and generally, if you know what data AP owns, then it’s much easier to create the baseline of processes and responsibility.
Don’t let yourself get overwhelmed with the data tables flowing to and from your ERP system. First, understand what input is submitted to AP, for example Invoices. Then, what output does AP send out, for example Payments. Try to think of inputs and outputs when thinking about data. Invoice -> Payment, there’s a lot that goes on between these two!
An AP manager should make a few good friends in the IT group. This group of individuals will help you understand how data is flowing into AP and how your ERP system is manipulating the data to support the AP function. Make a friend, seriously, this group is important to AP. Think of IT as the person AP comes home to after a long day… and they’ve made AP dinner, cleaned up the kitchen, fed the dog and cat, and all they want is a little bit of AP’s time to help organize the weekend plans.
What are inputs and outputs? Think of the inputs as water, constantly trickling into AP’s house. It moves into the house via pipes into several different appliances which then convert the water into something different of use. The water will move into radiators to produce heat in the house, or the water heater to create warm water for showers and dish washing, or the fridge freezer to create ice for drinking and bruised elbows. All of these are outputs.
If you hate the word data… you’re not gonna like this next paragraph- don’t say I didn’t warn you!
Time to get techy- everything in your AP system is being pulled from a data table. All the vendor names, the PO information, the payment details reside on what IT calls a data table. It’s easiest to think of it as a big excel spreadsheet with lists and lists of information. I have been in companies where there are several data tables that feed into one another, and I’ve also worked at companies where there is one data table that continually adds columns to create new fields. There are also companies who do not own their own data. This means they outsource the storage or processing of the data to a third party and thus are not able to directly manipulate or change the tables.
The water moves in, but is the water filtered, or is it from a well, or is it hard water? Is the water pumped manually or does the water pressure work to push the water forward unpropelled? In other words: are there multiple data tables? If there is one data table, how can it be viewed or maintained? What kind of fields are included in the data tables? IT has all the answers for these kinds of questions. They may even have a mapping for all the data processing between different systems.
It is important that AP learns a bit of IT language because it will help you understand what might be happening with errors you may be seeing. It’ll mean AP will come home to IT without there being any friction and the weekend plans will be easy to put together. Well… maybe not easy, but at least it’ll get done.
What is Accounts Payable? 