that could be automated. After processes were automated, companies
needed to automate their checks too, and so automated internal controls
were born.
To understand how this changed the business landscape, look at one exam-
ple of a process before and after automation. Before automation, the procure-
to-pay process involved lots of paperwork: the ordering department would
send paperwork to the purchasing department, which would then select the
vendor, negotiate the price, and inform the ordering department of the
expected arrival. The purchasing department would send delivery informa-
tion to the warehouse or mailroom staff who would match the order with the
delivery manifests when the goods arrived. The goods would be delivered
and the receipt signed and sent to the accounting department. When the
vendor invoiced the company, the accounting department would compare
the invoice quantity with the received amounts. They would then verify that
the invoice price was equal to the order price, and schedule the payment
based on the invoice terms. The procure-to-pay process involved multiple
departments and a whole lot of paper.
Now, after procure-to-pay is automated, all the paperwork comparisons done
by people in the accounting department are no longer necessary. Instead,
when the order is entered, the received quantity is recorded and automati-
cally compared and the invoice is paid on schedule according to the invoice
terms. Also, the work of the purchasing department is minimized: A depart-
ment can create orders and preselect vendors without having to involve the
purchasing department in every transaction. When the goods arrive, the
recipient records this event during the receiving process, where the quanti-
ties received are compared with the quantities ordered. When purchasing
receives the vendor invoice, they can then compare the price and the quan-
tity before making payment.
The arduous paperwork and continuous checking is removed when a process
is automated. That’s because the software is doing the checking for you.
The newsletter Compliance Week’s series, GRC Illustrated,points out these
additional benefits of automated controls:
Cheaper, with fewer errors:The average purchase-to-pay transaction
can be reduced from $12.03 to $8.58 when moving from a low to a high
level of automation. Automated transactions are between 10 and 25 per-
cent less prone to error.
Better protection:Preventative controls embedded in a system cannot
be ignored and are not subject to interpretation.
Quicker to detect and fix:There is little or no time lag between an event
occurring and being detected, so management can be notified immedi-
ately of a problem.
132 Part II: Diving into GRC
