Closing the Gaps with Better Workflows
Streamlining invoice processing with workflow automation can help you save a significant amount of time and money. Compared to manual invoice processing, an automated invoice flow accelerates approval times, increases data accuracy, and cuts down the cost of invoice preparation.
Workflow automation allows your business to replace the physical movement of paper with electronic routing, providing you with increased visibility into your business operations. All invoices get scanned and indexed upon receipt and prepped for electronic processing and management. This way, all your critical financial information is digitally stored, all approval alerts are automatic, and you don’t waste time passing paper documents from one office to another.
Workflow automation helps you streamline invoice processing by closing the gaps and reducing or eliminating pain points caused by manual AP processes. Here’s how.
No More Duplicate and Late Payments
Duplicate payments are a common challenge for businesses of all sizes. Estimations reveal that organizations can reach a duplication rate of 2%, meaning if your company’s AP invoices total $50 million, you may pay as much as $1.0 million due to duplicate payments. Another challenge, late payments, can result in penalties, create tension between you and your business partners, and cause inconsistent cash flow.
The inability to accurately monitor invoice flows, promptly approve them, and make payments on time can have a significant negative impact on your reputation and business relationships. Introducing AP automation can help you reduce both duplicate and late payments, as it gives you the possibility to track invoices and automatically route them to the appropriate manager for approval.
Fewer Lost Invoices
Invoices that get lost each month cost your business a significant amount of money. According to Pricewaterhouse Coopers ,an organization can spend as much as $220 for reproducing a lost document, due to the large number of working hours people spend on recovering the missing information. Multiply that by the number of invoices you’ve lost this year and you’ll see that manual AP processing can be considerably more expensive than it seems on the surface.
When you scan all your invoices upon receipt, you minimize the risk of misplacing or losing them altogether. In this case, you’ll streamline accessibility, knowing where your documents are at all times and having instant access to them from any device.
More Early-Payment Discounts
Most organizations capture only 18% of early payment discounts on invoices, according to research by PayStream Advisors. No matter your monthly invoice volume, capturing only 18% of possible discounts means you’re missing out on a significant amount of savings and tying up crucial cash flow.
The same research showed that depending on how streamlined their processes are, companies that implement AP automation can take advantage of 40% to 75% of early payment discounts thanks to their ability to approve payments in an efficient manner. There’s a big difference between 18% and 75%!
Greater Employee Productivity
Manual AP processes are time-consuming and prone to error. Employees have to open invoices, enter data into your ERP system manually, and route each paper document through various departments for approval. Moreover, every time someone enters inaccurate data in the system, your employees waste even more time identifying the problem and trying to fix it.
AP automation allows you to reduce the time your employees waste pushing paper around. An office that relies less on paper and more on digitized documents has more flexibility in managing tasks, which means your employees will be able to work more efficiently with fewer issues and have more time to concentrate on more value-added work. This way, they can place their focus on handling exceptions, resolving any problems with vendors, and working on revenue-generating projects.
Paying Only for the Goods and Services You Use
It’s not uncommon for busy companies to accidentally pay for goods and services they haven’t received. When all documents are processed manually, it’s hard to track every invoice, especially in AP departments that handle a high volume of documents each month.
Once you’ve paid for something you shouldn’t have, getting your money back requires emails back and forth between you and the vendor and likely a good deal of paperwork. By contrast, AP automation processes allows you to implement matching rules that can help you avoid payments for goods and services you haven’t received.
Measurable Impact to Your Bottom Line
Streamlining invoice processing gives you more control over your AP workflows, allowing you to monitor the entire process from surveying employee performance to identifying bottlenecks. With AP automation, you could cut down invoice processing costs from $15 per invoice to just $2.36—an undeniable improvement to your bottom line.
Automated AP processes allow you to integrate invoice processing with your ERP or accounting software to create consistent workflows and increased efficiency, which also means you can refocus your employees’ efforts from constantly resolving billing problems to higher value activities.
Ready to Get Started?
Going paperless is a lot easier when you have a trusted and experienced partner. Download now Your Step-by-Step Guide to AP Automation and learn more about AP automation and how to implement it successfully.