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Invoice Processing Automation

Accounts payable Invoice Processing Automation On the surface, Accounts Payable appears to be headed for higher heights, bolstered by a growing belief that the function contributes genuine value to the company as a whole. According to Ardent Partners’ Accounts Payable Metrics that Matter in 2020, there are three significant impediments to Accounts Payable automation:

  • There is an excessive amount of paper (40 percent )
  • Rate of Exceptions (62 percent )
  • Long approval times for invoices (51 percent )

Estonia marked the first anniversary of its public sector organizations abandoning paper invoices. This government effort has also encouraged the commercial sector to use enhanced digital invoices.

What is Accounts Payable Automation (AP Automation)?

On the surface, Accounts Payable appears to be headed for higher heights, bolstered by a growing belief that the function contributes genuine value to the company as a whole. According to Ardent Partners’ Accounts Payable Metrics that Matter in 2020, there are three significant impediments to Accounts Payable automation:

AP Automation software expedites the execution and preserves the accuracy of payments by automating some time-consuming manual operations such as invoice data entry, gap analysis, and approval workflow. Approved payments can often be scheduled and automatically changed at the appropriate time.

Six Good Reasons to Automate Invoice Processing

1. Working Capital Management

Businesses cannot afford to lose opportunities to free up operating cash in today’s economic climate. Businesses must adopt a more strategic approach to accounts payable to properly discover these possibilities and select the best course of action when faced with potentially conflicting outcomes.

Many companies use growing payables as a primary strategy, prolonging payables as feasible to increase free cash flow. Regrettably, this is not always the best approach. Delaying payment can erode supplier goodwill in some situations, leading to longer delivery times, a reduced desire to rectify problems, slower response times to inquiries, and more onerous payment terms. On the other hand, when suppliers give discounts or rebates for early payment, paying early can occasionally result in significant savings.

2. Invoice Data Entry That Is Faster And More Accurate

Invoice data is manually entered and sent from business units to the accounts payable team for assessment and approval in the typical workflow. Lack of visibility, resulting in late payments, duplicate payments, erroneous payments, and invoices that are occasionally left unprocessed entirely because they’ve been lost in the manual process.

3. Increase The Accuracy Of Invoice Processing

Errors in accounts payable management are costly and time-consuming to correct. An invoice exception happens when there is an issue with the invoice, such as delayed approval or routing difficulties. This can bring the payables process to a halt, and without verification or centralized information access, duplicate payments and other payment problems are a possibility.

4. An Easier Way To Invest In Analytics

Visibility and planning of spending is a significant issue, particularly with paper-based bills.  When you have easy access to digital archives, you can forget about lost or missing bills.

Spend visibility helps planning by enabling more precise budgeting and forecasting. Avenir Invoice flow, for example, is a one-of-a-kind AP Automation solution. It allows for greater transparency and insight into how money is spent.

5. Boost Productivity

An invoice exception occurs when there is a problem with an invoice, such as delayed approval or routing errors. This can bring the payables process to a halt, and without verification or centralized information access, duplicate payments and other payment problems are a possibility.

6. Lower The Cost Of Invoice Processing

AP departments that automate invoice processing can save money right away by lowering their processing costs. Access invoices, extract information, sort, scan, validate, match, and archive with the ultimate goal of decreasing manual handling, cycle time, and expenses by switching from manual to automated AP. AP automation can reduce the typical cost of processing a single invoice by roughly 13% (all-in, including labor, overhead, technology, and so on). This implies that it improves the day-to-day operations that support invoice processing and that businesses that do not prioritize AP performance would fall behind.

Final Thoughts

Invoice Processing Automation can help you eliminate the bottlenecks and error-prone processes that are taking up your employees’ time and costing you money.

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