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How the Pandemic Forced One City to Fix Accounts Payable

While having to close its offices and work remotely, a small city in Utah has cut its time for invoice processing in half using software from Stampli that automates and guides users through approval steps.

When municipalities are put to the test by a disaster such as COVID-19, sometimes it’s little process improvements, simple efficiency or bookkeeping practices that make the difference between staying on top of things and falling behind. The city of Spanish Fork, Utah, was trying to revamp its accounts payable system earlier this year when the pandemic gave the project extra urgency, and it led them to a single software tool that staff have used to cut the city’s invoice processing time in half.

Accounts payable is a common term for the city department that handles bills. When a contractor or other party wants to bill the city for something, they give an invoice to the “accounts payable” folks in the city treasurer’s office, who then figure out where to send the invoice and see it through to approval and payment. In Spanish Fork, a city of about 40,000 people, a four-person accounting team is responsible for this process, and it’s the job of one person to send about 1,200 invoices per month to the right approvers, according to an email from the city. About 75 percent of invoices come via postal mail, and the city’s finance director, Kent Clark, said his staff were “stressed to the max” even before the pandemic, looking for a way to streamline their accounts payable system.

“When then pandemic came, it just pushed it right to the front, because we were having all department heads coming into the office, approving, reviewing it on a paper basis, and that just wasn’t possible with COVID,” he said. “It wasn’t doable, and we were desperately trying to figure out a way we could solve it.”

Clark said his department tried using document management software at first, but it wasn’t a fix. It didn’t accommodate a two-way dialogue throughout the approval process, nor include the requisite accounting features, like the ability to assign bills to specific budgets.

“We went three months with another software, and it was a struggle every moment. We never really got to process one invoice after three months,” Clark said. “So we’d already gone through that experience, and then I had to go to (accounts payable) and say, ‘Here’s option B, ready for another one?’ and they were leery. But within one week, we were processing invoices.”

Spanish Fork’s option B came from a software company in Mountain View, Calif., called Stampli, whose entire focus is helping private- and public-sector clients automate their accounts payable systems. CEO Eyal Feldman said Stampli has been around since 2015 and serves more than 500 customers, most of which are in the U.S., but municipalities have been the fastest-growing market lately. He pointed to accounts payable as one example of a department whose job depends on other people, because a conversation happens around each invoice, and it’s hard to have that conversation with everyone working remotely.

“The year 2020 was the year when we’ve seen the most substantial increase in municipalities (as customers), and I think it has a lot to do with the challenges that COVID brought to this process,” Feldman said.

He said Stampli’s software was designed to be easy to implement and customizable according to a customer’s needs, in terms of the steps and who’s involved. Clark corroborated that description. He said the interface puts the invoice on one side of the screen, the accounting details on the other and in the middle, a history of what has happened with it so far. He said when his department receives an invoice, Stampli scans it with AI to pull information from it, transfers that to other appropriate forms and documents, then automatically forwards the invoice to the inboxes of the appropriate approvers or departments. Those city staff can then go into Stampli and approve their part of the invoice, and the software automatically engages whatever financial software is involved with the city’s accounts payable and confirms when the invoice has been processed and paid.

Christy Johnson, a member of Spanish Fork’s accounts payable team, wrote in an email that she can now send invoices to approvers on the same day they arrive.

“All we have to do is click ‘create export file’ and Stampli automatically creates the CSV file with all invoices awaiting payment,” she said. “I then upload the file into (our accounting software) Caselle, which eliminates manual data entry. What used to take up to 12 hours can now be done in about one hour.”

Feldman said some customers find their accounts payable staff are happier in their jobs without having to hunt people down for signatures or explanations. Clark said approval processing — the amount of time between an invoice arriving to an invoice being paid — has gone from two weeks to one, saving time and physical trips to the office for himself and his staff.

In this case, Clark said, the new normal is better than the old.

“We will not go back to the way we were,” he said.

Andrew Westrope is managing editor of the Center for Digital Education. Before that, he was a staff writer for Government Technology, and previously was a reporter and editor at community newspapers. He has a bachelor’s degree in physiology from Michigan State University and lives in Northern California.