Posted on: August 15, 2014

Never Fear The Hard Stop


One technique that I see corporations choose to go without is the implementation of hard stops within an ERP system. The hard stop is a device that, when implemented, can be incredibly effective in changing the way that the system allows new data entries.

The difference between a hard stop enabled system and a standard soft stop system is important. In a soft stop system, if multiple data items entered are duplications (vendor, invoice date, invoice amount or invoice number), the system alerts the user of the duplications but still allows the option to move forward and post the data. Yet in a system where the hard stop component has been enabled, when duplicated data is entered, the user is alerted to the duplications but cannot proceed further.

Most ERP system are designed to default to a soft stop set up. This means that the choice to implement hard stops has to be a conscious choice. The choice becomes one that when presented, many managers and owners choose to stick with the soft stop default because the hard stop set up seems too prohibitive. One of the primary concerns is usually that the hard stop system will make staff less effective, eating up time when the system stops them dead in their tracks, requiring a staff member to either research the situation immediately or set aside the document in a pile for later investigation. The implication is that this reduces staff productivity but really, it is an illusion. The illusion that if we ignore the problem on the front end, it will all but disappear on the back end. In reality, we are simple deferring the problem to a later date. The greater risk is, oddly, that the later date never comes. Meaning, that the duplicate payment is never discovered and the potential loss cash flow is never recovered. That is the greater risk, yet one that is often disregarded.

Without the data to track how often A/P processors are continuing after a soft stop alert, many organizations don’t truly understand the level of duplicate payment risk that goes on each day. What hard stops also reveal is the weak procedural areas within a company. When forced to research why a duplicate invoice has arrived in the accounts payable department, companies are better able to track patterns which eventually reveal root causes that need to be addressed. Organic root cause discovery like this is a great technique to dig down into your organization to make sustainable and effective changes. I would encourage you to consider implementing a hard stop system within your business as it can pay significant dividends in both processes and profits.

To know more, join Karl Andersson, CEO of Technology Insight in a series of webinars dedicated to Best Practices in Accounts Payable. Click here to view the list of upcoming webinars.

Cash Maximization in Accounts Payable

Topic(s): Accounts Payable

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