Process Mining Expert
Of course, I'd be happy to assist you with any questions you have about process mining. Whether you're looking for advice on implementation, dashboard building, use cases, KPIs, or handling data from source systems like SAP, Salesforce, ServiceNow, and others, I'm here to help. Please feel free to ask your question when you're ready.
Process mining can offer significant benefits to the accounting department of an organization. Here are some of the most common use cases:
Accounts Payable and Receivable Analysis: Process mining can be used to analyze the payment processes, identify bottlenecks and inefficiencies, and then take corrective measures. For example, it can help identify invoices that are taking too long to process or customers who are consistently late with payments.
Expense Management: Process mining can help organizations analyze and optimize their expense approval processes. This can lead to the discovery of patterns of overspending or policy violations that may be difficult to spot otherwise.
General Ledger and Period Close Process: The close process is often complex and involves many sub-processes. Process mining can provide insights into how the process is running and where there might be delays or inefficiencies that are impacting the time to close.
Financial Auditing: Process mining can help auditors by providing a detailed, data-based view of business processes. This can make it easier to identify anomalies, risks, and control issues.
Procure to Pay (P2P): This is a process which involves the goods/services procurement till the payment to vendors. Process mining can help in identifying bottlenecks, process deviations, potential frauds, and optimizing the process.
Order to Cash (O2C): This process starts from the order received from customer till the payment realization. Process mining can provide insights on order management, delivery efficiency, invoicing accuracy, and payment processing.
Remember, the goal of using process mining in these cases is to gain insights into process performance, find bottlenecks and inefficiencies, ensure compliance with policies and regulations, and ultimately improve the process and save costs.
Accounts payable (AP) is a critical function for any business, and process mining can provide valuable insights into this area. Here are some key aspects that you can analyze in accounts payable with process mining:
Invoice Processing: You can monitor how long it takes from the time an invoice is received until it's processed. If there are delays, you can identify where in the process they are happening and why.
Payment Timelines: You can analyze the time it takes from invoice approval to payment, and identify any delays or inefficiencies in this process.
Discount Opportunities: Some vendors offer discounts for early payment. You can analyze whether these opportunities are being utilized effectively or missed.
Supplier Behavior: You can study patterns in supplier invoicing and interactions. For example, you might identify suppliers who consistently invoice late, leading to rushed payments and potential errors.
Compliance and Policy Adherence: You can identify any deviations from standard AP processes, which could indicate mistakes, inefficiencies, or potential fraud.
Bottleneck Analysis: You can find out where your process is slowing down. Is it the approval process? Is data entry taking too long? Process mining can help identify these bottlenecks.
Duplicate Payments: Process mining can help in identifying patterns which can lead to duplicate payments. This can be due to the same invoice being entered into the system more than once, or paying off the same invoice via different payment methods.
Automation Opportunities: By identifying manual, repetitive tasks that take up a lot of time, you can find opportunities for automation, freeing up your team to work on more strategic tasks.
By analyzing these areas, you can find ways to make your accounts payable process more efficient, effective, and accurate.
Key Performance Indicators (KPIs) are used to evaluate the success of an organization or of a particular activity in which it engages. Here are three key KPIs that are often used in accounts payable:
Cost Per Invoice: This KPI measures the total cost associated with processing each individual invoice. It's calculated by dividing the total operational costs of the accounts payable department by the number of invoices processed in a given period. It's a critical measure of efficiency, and organizations should aim to lower this cost through process improvements and automation.
Invoice Processing Time: This measures the average time it takes to process an invoice, from the moment it's received until the payment is made. Long processing times can lead to missed discounts for early payment and strained supplier relationships. Reducing this time can lead to cost savings and improved efficiency.
Percentage of Invoices Paid On Time: This KPI measures the proportion of invoices that are paid within the terms agreed with the supplier. Late payments can lead to penalties, missed discounts, and damage to supplier relationships. A high percentage of on-time payments indicates a healthy AP process.
Remember, the most important KPIs for your organization will depend on your specific goals and challenges. These are general examples and may not apply equally to all organizations. It's crucial to define KPIs that align with your organization's strategic objectives.
Process documentation is an important aspect of any business process, including Accounts Payable (AP). Here are the steps to get started with documenting your AP process:
Identify the Start and End Points: The first step in documenting a process is to clearly define its boundaries. In the case of accounts payable, the process might start with receiving an invoice from a vendor and end with the payment of that invoice.
Identify the Steps in the Process: Once you've defined the start and end points, list out all the steps in the process. This might include receiving and reviewing the invoice, verifying the goods or services, approving the invoice for payment, and actually making the payment. Don't forget to include any checks or controls that are in place to prevent errors or fraud.
Create a Process Map: A process map is a visual representation of the process. It can help you understand the flow of the process, identify bottlenecks or points of confusion, and communicate the process to others. There are many tools available for creating process maps, from simple flowcharting tools to more complex process mining software.
Document the Details: For each step in the process, document the details. This might include the person or role responsible for the step, any tools or systems used, the expected output, and any policies or regulations that must be followed. You should also document any decision points or alternative paths in the process.
Review and Validate: Once you've documented the process, review it with the people who actually perform the tasks. They can help validate that the process is accurate and complete, and they might identify steps or details that you've missed.
Update Regularly: Business processes change over time, so it's important to review and update your documentation regularly. This can also be a good opportunity to look for ways to improve the process.
Remember, the goal of process documentation is not just to create a paper trail, but to understand and improve your processes. By documenting your AP process, you can identify opportunities for efficiency and accuracy, ensure compliance with regulations, and make it easier to onboard new employees or transition tasks between team members.
The data you would typically need for process mining in the context of Accounts Payable (AP) generally includes:
Event Logs: These are records of the various steps in your AP process. They usually include a timestamp, an activity name (e.g., "invoice received", "invoice approved", "payment made"), and a case ID that links related events together (e.g., all the events related to a specific invoice). Event logs are critical to process mining, as they allow you to reconstruct the process flow.
Invoice Data: This could include the invoice number, the supplier's name, the amount, the date the invoice was received, the date of the invoice itself, the payment due date, the date the invoice was approved, and the date payment was made. This data can give you insight into the specifics of each invoice and how it was processed.
Supplier Data: Information about your suppliers, such as their names, locations, contact details, and the terms of your agreements with them (e.g., payment terms, discounts for early payment) can provide context and help you understand variations in your AP process.
Payment Data: This includes the details of how payments were made (e.g., check, wire transfer, credit card), the amounts, dates, and any associated transaction fees.
Employee Data: Information about the employees involved in the AP process, including their roles and responsibilities, can help you understand who is involved at each step of the process.
Process Metadata: This might include the policies and rules that govern your AP process, the systems and tools used, and any known issues or bottlenecks. This data can provide context and help you understand why the process works the way it does.
Remember, the quality and completeness of your data is key to the success of your process mining project. The more complete and accurate your data, the better your understanding of the process will be. Additionally, it's important to ensure that you're complying with all relevant data privacy and protection regulations when collecting and using this data.
Here is a list of some specific SAP tables relevant to Accounts Payable:
Vendor - Masterdata
- LFA1 - Vendor Master (General Section)
- LFAT - Vendor master record (tax groupings)
- LFB1 - Vendor Master (Company Code)
- LFB5 - Vendor master (dunning data)
- LFBK - Vendor Master (Bank Details)
- LFBW - Vendor master record (withholding tax types)
- LFM1 - Vendor master record purchasing organization data
- LFZA - Permitted Alternative Payee
- TIBAN - IBAN
- BKPF - Accounting Document Header
- BSAK - Accounting: Secondary Index for Vendors (Cleared Items)
- BSEC - One-Time Account Data Document Segment
- BSIK - Accounting: Secondary Index for Vendors
- BSIP - Index for Vendor Validation of Double Documents
- FPAYHX - Payment Medium: Prepared Data for Payment
- LFC1 - Vendor master (transaction figures)
- REGUH - Settlement data from payment program
- REGUP - Processed items from payment program
- REGUV - Control records for the payment program
- VBKPF - Document Header for Document Parking
- VBSEC - Document Parking One-Time Data Document Segment
- VBSEGK - Document Segment for Vendor Document Parking
- VBSEGS - Document Segment for Document Parking - G/L Account Database
- VBSET - Document Segment for Taxes Document Parking
Additional tables for Transactional Data in New General Ledger
- BSEG_ADD - Entry View of Accounting Document for Additional Ledgers
- FAGL_SPLINFO - Splittting Information of Open Items
- FAGLFLEXA - General Ledger: Items
- FAGLFLEXP - General Ledger: Plan Line Items
- FAGLFLEXT - General Ledger: Totals
New Finance tables in S/4 for Transactional Data
- ACDOCA - Universal Journal Entry Line Items
- ACDOCC - Consolidation Journal
- ACDOCP - Plan Data Line Items
- T007A - Tax Keys
- T007B - Tax Processing in Accounting
- T007S - Tax Code Names
- T059A - Type of Recipient For Vendors
- T059B - Withholding Tax Classes for Vendors: Names
- T003 - Document Types for Finance
- T008 - Blocking Reasons for Automatic Payment Transcations
- T009 - Fiscal Year Variants
- T052 - Terms of Payment
- T077K - Supplier Account Groups
- T077Y - Account Group Names (Table T077K)
Please note that each of these tables serves a specific purpose and contains unique data that could be important for different aspects of Accounts Payable. For example, vendor master data tables (like LFA1, LFB1, etc.) contain information about vendors, transactional data tables (like BKPF, BSAK, etc.) contain information about individual transactions, and so on.