Accounts Payable is the source of a lot of paper in organizations—it’s also full of time-intensive processes.
Companies process hundreds (if not thousands) of invoices each month for materials and services. And, while some businesses may receive invoices electronically (via e-mail or EDI), the majority of invoices are still paper-based (arriving through the traditional postal system).
The Future is Paperless - The Future is Now
Although most companies are trying to become more environmentally friendly, businesses still produce more than 4 billion pages of paper documents each year.
Additionally, each of the 4 billion pages includes hidden labor and production costs. A report from the International Data Corporation (IDC) stated that the volume of data being stored is more than doubling every two years, and over the next decade it will likely grow to 50 times the current amount. We must find a better way to manage data, especially when there’s added value.
Time is Money
According to the same study, there are countless hours wasted on paper-based document related tasks performed by a typical knowledge worker (i.e., someone responsible for handling and/or using data, such as an accountant).
It Doesn't Have to be This Way
These hours comprise a huge percentage of the work week, but working with documents is a key task performed by knowledge workers. More troubling in the findings of the IDC investigation, were the number of hours wasted because of inefficient processes, poor document management, and the lack of technology to automate the overall process.
While Document Management Software can’t eliminate all of the time AP (and other departments) spend working with documents, it can greatly improve efficiency and accuracy.
Additionally, document management software can ensure that employees spend the time productively, rather than wasting their talents searching, routing, and filing documents. In fact, the right solution can be implemented to provide rapid automation, with minimal business disruption.
The right accounting automation solution processes invoices and their data from the time they are captured (scanned) to the time they are paid or denied - avoiding lost documentation, missed payments, late penalties, and inaccurate accruals. By storing, organizing and indexing documents, the document management system ensures that AP professionals can find any current or historical document in seconds. This means that a document management solution delivers measurable cost-savings in AP alone.
Furthermore, accounting automation solutions automate key processes that manage automatic routing, efficiently directing documents from one stage of approval to the next, while allowing key personnel to check the status at any point.
Automatic processing can include matching up incoming vendor invoices with purchase orders; sending invoices or purchase orders for manager approval; routing invoices to other departments for verification; and sending reviewed and approved invoices back to AP for payment.
Want to learn more about how Accounting Automation can make your accounting department more efficient? Schedule a current-state analysis today!