SAP - Electronic Bank Statement (Error Message FB772 and FB 729)

1. What is automation:- Technology that reduces human intervention in the process and 

i. The process works as per predefined logic 

ii. Relationship between activities.

The core concept is "relationship".

 

2. Why Automation  

Automation helps in 

1. Reducing risk of error and fraud. 

2. Increase control efficiency and effectiveness 

3. Streamline processes.

4. Helps in measuring the outcome of activities.

5. Ultimately business growth 

3. Process maturity level and automation. 

Process Maturity Model

4. Some example of Procurement to Payment (P2P) Automation

i. Vendor Portal: Validates supplier information before it is entered into the supplier master file.

Risk Mitigation

1. Duplicate check:- Suppliers are automatically validated before they are entered into the supplier master file.

2. Compliance check:-  GST and Tax validation reduce the risk of fines and incorrect tax information, which could result in penalties.

3. A sound upfront supplier validation process reduces the risk of an employee intending to act as a supplier.

4. Documentation supporting the validation of the supplier is obtained within the onboarding process. KYC, tax forms, insurance forms, e-payment information, diversity, and supplier profile information can be gathered in a single process.

ii. E-Invoicing:- E-invoicing is one of the key enablers of a fully automated accounts payable function. Companies around the world are adopting e-invoices to streamline their operations, eliminate waste, and unlock the working capital value of innovative payment strategies.

Risk Mitigation

1. E-invoicing eliminates the risk of processing a duplicate invoice, paying an incorrect amount, or paying the invoice to an incorrect supplier.

2. It removes possible financial exposure for the company since invoices are paid more accurately.

3. It also reduces the risk of fraud and builds in Segregation of Duties (SoD) controls.

iii. Document Management, Invoice Scan, and Data Capture:- A document management system is used to track and store electronic documents and/or images of paper documents.

It is usually also capable of keeping track of the different versions modified by different users.

Risk Mitigation

1. Eliminates the risk of processing a duplicate invoice, paying an incorrect amount, or paying the invoice to an incorrect supplier.

2. This automation solution also reduces the risk of fraud and builds in Segregation of Duties (SoD) controls.

 

vi. Automated Workflow Approvals (BPM tool):- In an automated workflow approval process, the invoice approval process is linked to your company’s Delegation of Authority (DoA) policy.

The invoice approval process is completely automated based on defined rules via workflow.

The workflow determines if an invoice needs approval; who the appropriate approvers are; and in what order approvers should approve payment of the invoice.

Risk Mitigation

1. An automated workflow can be linked to the employee master file in which approval levels are automatically updated when an approval moves to another department and is promoted.

2. Reduces the risk of fraud since there is no opportunity for manual manipulation.

3.  Escalation processes can be built into the workflow to link to the Delegation of Authority (DoA) policy and tables.

 

v. Automated Matching:- Automated three-way matching provides an immediate match of the invoice, purchase order, and receipt when using related accounts payable automation solution. The user is also responsible for resolving any exceptions that may occur to determine if violation of business rules needs to be addressed.

Risk Mitigation 

1. Automated matching performs the three-way with no human intervention, reducing the risk of error and improper matches. 

2. Reduces the risk of paying an erroneous or duplicate payment.

3. Improves the invoice cycle time process and reduces processing costs.

4. Provides data accuracy based on user-defined matching rules.

 

vi. E-Payment:- Automated generation of payment file on the basis of business logic (Like payment terms, Nature of vendor, Industry, MSME) and Direct transfer.

Risk Mitigation 

1. The E-payment process reduces risk and enhances internal control for the P2P process.

2. The use of e-payment reduces check fraud, check reconciliation issues, and escheatment process challenges.

 

vii. Accounts Payable Self-Audit Tools:- The goal of any accounts payable department is to pay a supplier “once and only once”. Self-assessment process that identifies a possible duplicate payment before the payment is initiated. This software considers “fuzzy” logic algorithms that flag a potential duplicate or erroneous payment.

Risk Mitigation 

1. A self-audit tool can often be included in a company’s internal control program as a continuous control monitoring (CCM) initiative.

2. Duplicate and erroneous payments are prevented before the cash is disbursed, improving the company’s working capital and cash flow position.

3. Process improvements and improvements to internal control programs can be made in a real-time environment.

 

vii. E-Procurement:- The E-Procurement solution includes the ability to issue Purchase Order Requests and Purchase Orders and build a corresponding approval chain electronically.

Risk Mitigation

1. Requisitions and Purchase Orders are created electronically, removing the risk of errors made in the manual data entry process.

2. Direct integration with an ERP system supports the three-way matching process and removes the risk of any clearing account reconciliation issues.

 

 Thank You!