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How To Improve Invoice Processing Efficiency

 
 

If you’ve subscribed to any AP Publication, you’ve likely noticed the growing number of articles and think pieces declaring the importance of moving your critical processes-- namely the Invoice Approval Process-- to an automated solution.

Maybe you feel that that’s a wonderful aspiration for your organization, but worry about the effort involved in a wide-scale change to automate invoicing. Like most impactful, organizational changes, automating takes a bit of work on the front-end, but the efficiencies that your organization can realize by making the switch to Invoice Process Automation far outweighs the effort your team will put in to get there!

The Inefficiencies of a Manual Invoice Process

Before looking at how Invoice Automation can help make your process more efficient, we must take a look at the common inefficiencies of a manual process. One of the biggest areas of inefficiencies is at the beginning of the process: Date Entry.

Many organizations are still manually entering Invoice data into their accounting systems. The inefficiencies in this part of the process are mainly focused around the amount of time it takes to physically copy -- or type -- the data from the invoice into the accounting system. Data Errors are a huge risk at this stage of the process: a single typo or failure to tab between fields can lead to a huge slow down if the invoice later needs to be found & re-entered.

“And don’t get me started on routing…”

Invoice Stock Image 4

Picture this: A large invoice comes in which requires several levels of approval. How is your organization handling that today? How many copies of the invoice are made? Or -- in a more digital scenario -- how many emails are sent out to ensure that all necessary parties are made aware? How much follow-up is involved in those layers of approval and who is responsible for that? 

Now imagine you’ve been through all those layers of approval; you’ve chased down every approver, crossed the t’s and dotted the i’s, and just before you submit payment, you see it... the dreaded data entry error. What’s the overhead on cancelling that and sending the invoice back through that manual process? How much time has been wasted? How much money?

Routing and approvals alone can become a nightmare scenario if not managed with dedicated oversight. Missing a single approval can cause a bottleneck on the whole process and delay vendor payments, or worse: lead to missed payments, or a payment made where a payment should not have been made.

Another inefficiency of manual processing is keeping track of where an invoice is at any given time. If a vendor calls and needs to know the status of their payment, you may need to go from desk to desk, approver to approver to find that information. Or, maybe you have a manually-updated spreadsheet for tracking your invoices, in which case you better hope it’s been kept up-to-date by the last person who touched that invoice! 

As you can see (and are probably already well aware), a single error at any step of the manual processing of your invoices can snowball into huge inefficiencies if not well-managed!

Automating for Efficiencies

Invoice Stock Image 2

Today, many companies rely on Invoice Process Automation to minimize data entry errors, reduce the amount of time spent sorting documents and fixing mistakes, and to intelligently route Invoices to the appropriate resources for review, all while maintaining visibility into every step of the process.

In an Automated Invoice Process such as DocuPhase’s offering, Optical Character Recognition (OCR) will read the invoice for you and pull the important values from the page -- minimizing time spent on data entry and errors which can come from manual entry -- and allowing your team to focus on what’s important: reviewing the Invoice. With less time spent on Data Entry and more time spent on the Invoices themselves, your team will be able to process more invoices in the same amount of time. 

Automatic routing based on predefined rules ensures that everyone who needs to see an invoice can see it, and more importantly: that the invoice remains visible in the system to your team even while it’s being reviewed by the approvers. When a vendor calls to inquire about the status of their invoice, an automated system can show you exactly where that document is, who is currently processing it, and allow quick insights into the approval status of the invoice.

This increase in efficiency may allow you to take advantage of more early payment incentives from your vendors and ensure that your Vendor/Client relationships remain solid. Late payments can mean those Early Payment incentives disappear, and vendors may start to demand cash on delivery; depending on your organization, that may mean the need to sever the relationship with a valued vendor. Paying your invoices on time-- or early -- will keep your organization in good standing with the vendors you rely on.

Conclusion

Ultimately, an automated invoice process can save your organization money, but more importantly, it can save you the most precious resource of all: Time. Gaining time that was previously spent chasing down documents or resolving errors back can be the difference between processing all your invoices on time and being behind. The DocuPhase Team can help show you where your organization can realize efficiencies, minimize the time your team spends processing invoices, and improve your Invoice Processes!

Schedule a meeting with our Automation Experts to learn more about how DocuPhase can put your business on the path to better invoice processing efficiencies.

 

Other related articles you may like: Data Entry is the Best, Said No One Ever.

 

DocuPhase

A leader in Enterprise Automation software, DocuPhase delivers document management, workflow automation, and capture tools designed to help your enterprise stay organized and meet evolving technology and business needs.