Fed-up with invoice processing problems? Streamline payables with intelligent process automation
Manual processing of paper invoices is a slow, costly, and error-prone process. Your AP staff is probably fed-up chasing approvals and pushing all that paper around. Delays in processing mean late payments, which in turn means that your vendors are unhappy. Errors in invoices also are a nightmare during financial audits. Audit problems give your top management sleepless nights! If this is the scenario in your AP department, it's time you adopted an AP automation solution.
Have you reached saturation point with manual AP processes?
As your organization grows, you reach a saturation level when manual processing of accounts payables becomes tedious and difficult to maintain. Invoice processing problems crop up regularly and lead to pending payment approvals and compliance issues.
Failing to manage accounts payable effectively seriously hurts a business. CFOs who do not have effective control over their AP strategy severely affect their company's liquidity and cash flow.
If you want to regain control of your AP processing, you must first understand what's causing bottlenecks in your AP processing.
Manual invoice processing problems
AP tasks require close attention to detail, and an increase in volume seriously overloads the manual process.
Here's what the manual AP process looks like:
The AP process begins when the team receives the invoice for any purchases made.
The operations team verifies invoices against the goods and services delivered.
On receipt of the confirmation, the payment against the invoice is to be approved.
Before payment clearance, the Finance team checks if the invoice complies with the organization's financial and other policies.
Next, AP staff manually enter the invoice details into the accounting system, retaining a physical copy for audit compliance.
Once this is complete, the AP team releases the payment to the vendor.
Sounds tiresome? Yes, it is. Moreover, a manual error in any one of the steps will have unpleasant consequences.
71% of companies surveyed in Levvel's Payables Insight Report (2019) reported manual data entry and inefficient AP processes as one of their top pain points.
Levvel's report outlined these key invoice processing challenges:
#1 Invoice receipt
How many invoices do your AP team have to process daily? What percentage of your incoming invoices are in paper format? Reduce the load on AP teams by using credit cards or prepaid cards for low-value transactions. According to Levvel's report, many companies still receive almost half their invoices in paper format. Switch off paper to gain invoice processing efficiency.
#2 Manual data entry
According to the Levvel report, 86% of SMEs capture invoice details manually. Only 27% of mid-market organizations and 14% of SMEs use an automated solution. Organizations still lag in capturing unstructured invoice data. Manual data entry is a touchpoint for errors.
Switch to electronic: scan paper invoices or import faxed or emailed invoices and convert them to electronic images. OCR technology captures the data from the invoices and minimizes manual tasks associated with entering the data and indexing them.
#3 Invoice routing
How complex or lengthy are your invoice approval processes? According to Levvel's report, nearly half of SMEs route invoices for approval manually by walking to approvers' desks, while 87% of enterprises use automated invoice routing. Automation improves invoice approvals cycle times. 52% of organizations using AP automation approve invoices in less than four days, compared to 41% of organizations using manual processes.
#4 Hidden costs of manual invoice processing
AP insiders joke about how the cost of processing an invoice is sometimes higher than the amount of the invoice itself! Have you considered the hidden costs you incur in manual processing?
AP automation has a significant cost impact—a 50% cost reduction or more, leading to immediate cost savings for the company and better ROI.
Automate to overcome invoice processing problems
Take these challenges out of your invoice processing with an invoice automation solution that unclogs the process and your cash flow.
Most companies complain that AP automation solutions are too expensive, take too long to set up, and are challenging for AP staff to learn and use. What you need is an AP automation solution that's quick to install—(no stalling the AP department's regular work!) and is up and running in days rather than weeks. Also, you don't want to have to bring in a truckload of IT specialists to get going. And most of all, your AP staff must be able to get the hang of it quickly and willing to use it.
The essential processes in an automated workflow for accounts payable processing are:
Capture, extract, and index
Automating invoice processing begins with turning paper into "business ready" information. Scanning and intelligent OCR eliminates almost all manual data entry. Automated capture, extraction, and indexing saves time and improves accuracy.
Process and manage invoice routing
Once invoices enter an automated digital workflow, the finance department has a complete audit trail of all the steps: who raised the invoices, who modified them, who approved them and when, and the amount payable. AP staff quickly identify the next steps, address approval bottlenecks, ensure contract agreements and discounts are met, and answer vendor and auditor inquiries.
Digital storage and access
An enterprise content management system securely stores all AP documents and makes them accessible on-demand, from anywhere, and on any device. Centralized electronic storage is preferable rather than having multiple copies of invoices all around the office. Role-based access and data security features give view or edit access only to authorized persons.
Integrate with ERP and other business systems
Seamless integration with the organization's other accounting and business systems is the key to achieving the full benefits of accounts payable automation. Extract relevant data from invoices and connect it with your enterprise applications to speed up invoice processing and better control your corporate spending. Companies that integrate their AP and ERP solutions process much higher volumes than those that don't.
To summarize, a complete automated AP solution should be able to:
Capture invoices from multiple channels
Create and store invoices electronically
Retrieve electronic copies when required
Extract information from images
Automatically match invoices with purchase orders
Integrate the results into enterprise applications and record systems
Revolution Data Systems is a leader in the field of Intelligent Process Automation (IPA). Our Invoice Automation Software provides an end-to-end invoice automation solution.
It starts with capturing data from multiple sources, uses OCR to read required fields and auto-classify them, extracts data (like order numbers), matches orders and receipts, validates them based on set rules, and sends them for approvals.
docAlpha reduces time-consuming manual efforts, eliminates errors, and reduces invoice processing cycle times. It improves compliance, streamlines your cash flow, and reduces invoice processing costs significantly.
Talk to our IPA experts at RDS and ask for a demo of docAlpha—your route to smart invoice processing!