E-Invoicing: Get More Done In Less Time With Automation
The manual invoicing process is riddled with inefficiencies at all levels. AP staff and finance departments are throwing countless annual hours to the wind that could easily be redirected to more productive tasks through the adoption of e-invoicing and the elegantly automated approach it entails.
This article will cover the deep and multiple benefits of e-invoicing, the hidden and explicit costs of continuing with “business as usual”, and tips on avoiding “imposter e-invoicing” methods that don’t deliver a truly automated experience.
The Towering Costs of Manual Invoicing and AP
In order to truly understand and appreciate the importance of e-invoicing, it’s vital to grasp the hidden costs of continuing with the manual status quo. If a company’s AP staff or finance departments operate manually, here are some of the deepest resource gouges it can (and should) expect.
And remember, even if these costs seem small day by day, their cumulative annual impact can be staggering…
—Incorrect data entry from human error.
—Lost time and company resources due to fixing those errors.
—Wasted time and human productivity from manual invoice approval.
—Duplicate manual entries leading to duplicate payments.
—Dramatically heightened risk of fraudulent invoices.
E-Invoicing: A Life-Raft In A Sea Of Inefficiency
All of this senseless waste of AP time and resources (both tangible and intangible) may seem both daunting and depressing. Because, frankly, it is depressing. But it doesn’t have to be daunting. There’s a supremely simple fix being implemented by all sorts of companies spanning countless industries: e-invoicing.
The advantages of invoice automation are many and deep. But let’s begin with a broad overview first. E-invoicing is a SaaS (software as a service) solution and method of operation in the world of AP. The primary distinguishing factor of e-invoicing is its strategic centrality. All key info around the invoicing and supplier relations process is uploaded into a centrally accessible cloud-storage database.
This means that multiple individuals from different departments can access the same body of general info, but pull the individual bits and pieces from it that are relevant to their department and its operations. This totally eliminates the time and resource burden of employees running between departments daily in order to cross-check their info, verify approval, and so on. The total annual resource savings in terms of actual employee productivity from this aspect alone are considerable.
Fraud prevention is another benefit of invoice automation that can generate massive year-over-year savings for a business. Here’s the thing about fraudulent invoices…it only takes the fraudster one successful attempt on average to establish a deceptive (but lucrative) tie to a company’s AP department. Manual AP staff lack a centralized list of pre-approved and verified vendors.
So when a fraudulent invoice comes through, the odds of it “falling through the cracks” and getting paid are extremely high. And what do companies tend to do with their suppliers? Keep paying them with each monthly invoice, of course. They are, after all, providing a highly valuable service to the business.
The short- and long-term problems here should be glaringly apparent. But these risks are hugely alleviated with invoice automation. E-invoicing solutions allow a business to set up a verified list of approved suppliers, and instantly check each invoice against that list. An invoice from a supplier not present on the list will immediately be flagged for further inspection and possible fraud, so that it can be traced and verified one way or the other.
Automation even gives you the opportunity to improve relationships with your genuine suppliers. E-invoicing software usually comes equipped with a supplier portal, so your suppliers can check the status of their invoices, and early payment arrangements can even be made if desired. This of course saves time in the long run in the form of calls and emails from suppliers inquiring about their invoice status.
Finally—an all-important point in today’s world of rampant cybercrime—automation keeps all data entries and fields completely digitally secure. From a company’s vital info to its suppliers’ private information and beyond, this is an extremely important point to consider. The heightened risk factor of stolen or misappropriated info from a physical invoice getting lost or compromised forms a stark contrast point here…
Faux Automation: Don’t Get Pulled In…
A quick note on “faux automation” is necessary. The core distinctions of e-invoicing are its cloud-based centrality, and its total elimination of paper or manual processes. It’s important for businesses to avoid these methods that claim to reduce AP waste and inefficiency but fall far short of automation’s true potency.
The two common culprits to be on guard for are email invoicing and OCR software (optical character recognition). In the case of email invoicing, a supplier will simply email rather than mail their invoice. It’s a difference of delivery and that’s it. The invoice must still be printed or manually transcribed to a company’s records by a human being, with all the implicit risk of error and inefficiency we’ve discussed.
It’s also common to see AP staff using OCR software in a non-automated environment to quickly transcribe and record physically mailed invoices or emailed pdf invoices. Again, once the invoices are recorded by the software, an employee has to manually verify the info, resulting in as much wasted time and resources as with a fully manual operation. While e-invoicing also makes use of OCR, it does so in a fully automated manner.
Businesses should be on guard against faux automation sideswiping their efficiency.
Summing Up
The world is experiencing a sea change in how AP departments will survive and thrive in the coming decades. But as with all matters of technological adoption, this is a rising tide that businesses must choose to be lifted by.
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Think OCR invoice processing will speed up your AP workflow?