Many organizations are still processing invoices manually by having their AP personnel key invoices into the accounting software. Manual methods are labor-intensive and error-prone, needing full attention to process supplier invoices accurately. Data entry is time-consuming, responding to supplier inquiries and acquiring approvals that can be laggard in the process.
But many businesses have started enjoying the competitive benefits that come with accounts payable automation and invoice processing.
Various Applications for Invoice Automation Solution
With the software, there is no uncertainty about where an invoice should go once it is received in the system. The solution learns your approval workflows in order to make sure that your methods are intact.
Performance, compliance, and other audits are common and essential for the business functions in the private and public sectors. The invoice automation system ensures that an audit never catches the company off guard. The reviewer seats can be given to auditors to monitor accounts payable metrics and check invoices with read-only access.
c) Supplier Relationship
The solution can function like a service representative given supplier portals where they can check the status of the invoices. The solution can also track which supplier payment deadlines are looming, instead of forcing the representatives to track payment due dates manually. It is helpful since 90% of AP team members get calls from suppliers asking about the money.
Invoice automation can boost your AP team’s operations and provide superior outcomes than the outdated manual processing setups for organizations.
1. Eliminates Fraud
Fraud remains a significant problem for businesses. Even large-scale organizations can fall victims losing over 100 million dollars. Cloud-based AP solution can eliminate the degree to which such kind of incidents take place. It is both because the solution’s archiving tools can store endless amounts of customer information, thus making it easy and secure to retrieve. Plus, it has in-built indicators for possible fraudulent activities, flagging invoices that do not conform to the norms.
2. Data Integration
The data that stays within the world of AP winds up often siloed. By automating accounts payable, the invoice data can be shared throughout various platforms that businesses use, including ERP systems.
The hidden cost of processing invoices will add something, though the bump will be lesser for the businesses with widely-adopted invoice automation. It has been observed that organizations with higher automation levels would pay 1.8 dollars per invoice to process. Whereas, companies with lower automation would pay nearly six times as much as 8 dollars per invoice. The processing costs can run as high as 40 to 50 dollars per manual invoice. Hence, whatever be the case, there can be huge savings for organizations that deploy invoice automation with up to 85% reductions in the procure-to-pay process.
Suppliers will offer discounts on invoices frequently in exchange for paying them earlier than needed. When discounts might only be 3% of invoice amounts, they can add up over time, with organizations processing over 25,000 invoices every month.
But companies miss out on such discounts, and paper invoices might be the key culprit for this. It has been observed that above 50% of businesses, even with extensive automation, paid at least 8% of invoices they received late. If organizations with good automation are still struggling to hit deadlines, then it suggests that the early discount numbers for organizations that cling to traditional invoice processing are a horror show.
Steps for Deploying Invoice Automation
a) Pre-automation evaluation
Ahead of calling an invoice automation supplier, it is smart to perform a few evaluations and make the essential changes. It involves looking at the present procedure. A few organizations get entry-level accounts payable representatives from temporary staffing agencies and implement them with minimum training. Regardless of the processes, it is also good to consider invoice oversight centralization, segregation of duties, and standardization of policies.
Many times, suppliers will sell payments as their main product with the automation feature. For the sake of payment freedom, it is good to examine with the provider that costs can be processed outside the system. Plus, the all-in-one AP automation software with payment freedom provides the value as you are not stuck with a single payment process.
Invoice automation will fail to work optimally without extra work once it is intact. An advisable task includes toggling the self-service tools for suppliers that can enable them to upgrade payment information when desired. It is also advisable to spot invoice automation suppliers that have a hand-holding setup and continuous 24/7 support when required.
The three-way matching is an essential aspect of AP. Matching invoices with POs and receipt reports show that an organization agreed upon the goods and received them. Hence, invoice automation software that an organization puts in place must be able to do it automatically. The software must work with any ERPs or other internal applications. Otherwise, it can negate significant investments, which businesses make in such solutions and compound expenses.
With all the advances in cloud and mobile computing, automation platforms will continue to grow. Suppliers are excellent at making sure that their partners get updates from SaaS solution- as it is smart to learn about everything that a robust accounts payable solution can do to your business.