Are your purchase-to-pay and supplier invoice processes making your organization more efficient or slowing it down? Today, businesses receive and send up to millions of invoices each year. And that amount is only rising – according to the Billentis 2019 annual report, the number of invoices sent annually is expected to quadruple by 2025!
Invoicing is necessary for any business to profit and grow. But the invoice process takes time and resources from organizations each day. Especially now, businesses need to maximize as much of their limited resources as possible. How can you do more with less resources? Enter: technology.
Adopting technology to automate your invoice routines helps you gain considerable advantages. Here are three benefits:
1. Reduce financial costs
Streamlining your supplier invoice entry enables big financial gains. Every single invoice takes time and costs money to process. Say you process around 50 000 invoices per year. Each invoice would typically go through these steps:
- Invoice arrives at front desk
- Envelope treatment (opening and sorting) or invoice PDF download
- Scanning of PDF image
- Manually entering invoice information into your financial system
- Attaching the PDF invoice into your system
- Validating data and ensuring complete information
- Error/exception handling – includes excess time from calling the supplier in order to get more information on the invoice or searching for the correct information internally, e.g. purchase order number or reference
- Manual data enrichment
Completing all these steps for each invoice takes up a lot of your time. And according to our customer data, the average cost per invoice is $8-12 in just cycle time and processing costs! This doesn’t include the cost of lost invoices, which results in late payment fees and interest. Therefore, on average, your costs for all 50 000 invoices would total up to an extra $600 000 per year. Yikes!
When you adopt software that streamlines your invoice processing, you could save up to 80% of these costs (Billentis, 2019).
How can you do this? By adopting an electronic invoice (e-invoice) process, which costs far less than paper and PDF invoices. Contrary to popular belief, PDF invoices, although digital, are not true e-invoices. E-invoicing is an integrated solution that enables a fully automated flow directly from one company’s system to another. An e-invoice will include all of the information that is needed to eliminate most of the manual work and exception handling, leaving you with minimal costs and zero headaches. Bringing me to my next point.
2. Eliminate manual processes
Once you adopt technology to automate your invoice process, not only are you saving financial resources, but your employee resources, too. Your finance team is critical to your organization’s success. When automating these processes, all of the work is done automatically for your team.
While there are many automation tools out there, the smartest way to truly eliminate manual work is to focus on the very first step of the process: getting complete and accurate data into your system. This will unlock the full functionality of your approval system and reduce most of the steps in the process.
Simply put, the less manual work needed, the more time your finance team can focus on other priorities and strategies that will help your business grow and sustain itself.
An automated process is also a win for your suppliers because it will enable them to digitalize their supplier process. Read more about supplier automation benefits.
3. Accurate and complete information
Lastly, another one of the many benefits to streamlining your purchase-to-pay process is that you can ensure you’re receiving accurate and complete information. The more accurate and complete information you have, the less time and headaches spent on fixing wrong information. Imagine manually entering 50 000 invoices per year – it’s no wonder data entry errors are one of the largest issues for accounts payable departments. The more manual work, the higher the chance for error. Streamlining this process reduces the chance for errors and enables an efficient approval process, helping you make smarter decisions.
In today’s world, organizations need to be strategic on how to do more with less when it comes to resources. Accurate and complete invoice data will help you get there.
Streamlining your business processes with technology creates a win-win situation for both the buyer and supplier. You, the buyer, will save time and money while your supplier will get paid faster, fostering a positive relationship. And now, that you’re equipped with all the time and budget gained back, imagine the possibilities of what your organization can accomplish to further stimulate growth.
Pagero can help streamline your purchase-to-pay and order-to-cash processes, whether you’re a buyer or supplier.
Want to find out more about how it works? Learn how our customer, Shawcor, streamlined their AP processes.