A step-by-step approach to continuing, and adapting, your invoice automation
By Michael Ereli, US Market Director, Proactis
Companies and their Finance departments all over the world are being forced to adapt and be agile. Time doesn’t stand still, financial obligations must be respected, and business needs to still be there. The continuity, and adaptation, of accounts payable operations is crucial.
Invoice Automation, or automated invoice processing, is the process of seamlessly extracting data from invoices entering your system and pushing it into your ERP so that processing a payment can be done in just a few clicks.
But how do you go about getting from where you were before the pandemic, to effective invoice processing in the current climate and beyond?
How to automate invoice processing step by step
Fortunately, this is one important initiative that can be undertaken as a series of small steps, and can generally be done without making any significant changes to your existing systems:
1. Analyze current invocing processes
Identify how invoices now flow through your company. For example, where are they received, how do they get to Accounts Payable (AP), how are they validated, what is the average time it takes to process an invoice? The key is to understand where bottlenecks and delays exist, and how much it’s costing. You will probably find opportunities to improve current procedures
2. Standardize invoicing policies and procedures, where possible
Take the time to define procedures for the processing of PO and non-PO invoices
– e.g. duplicity and mathematical integrity checks, matching criteria, discrepancy resolution workflow, dispute and approval workflow. Clarify exactly how invoices should be processed. This will better guide your current procedures.
3. Automate invoice processes
There are many tools that can be implemented quickly to automate the invoicing process, but always ensure that they satisfy your established requirements. Using an Invoice Management tool
will mean your business can receive, process and pay invoices no matter where you are.
You should aim for a single, consistent invoice automation process regardless of how many ways you initially capture invoices. Anyone relying on paper-based, manual Accounts Payable
processes are now challenged. But "straight-through"
invoice processing is readily available, with little or no human interaction.
You can leverage any electronic invoicing opportunities you may already have in place while using a combination of scanning, OCR and keying to capture paper invoices
. If needed, this can be done on an incremental basis by implementing electronic invoices with your larger customers or through trading networks. These methods will act as increasingly efficient means of moving invoices into automated invoice processing.
4. Enable supplier self-service and early payment discounts
With all invoices being processed in a consistent electronic manner, it’s an easy step to make status information available to suppliers with the ability to process invoices much more quickly, you will be in a position to take advantage of any early payment discount terms your suppliers may offer, or accelerate payments to your suppliers
. Once you have a real handle on invoice processing, this may be a source of significant savings over time and/or a great source of support for your suppliers.
5. Leverage information for better sourcing
Invoice processing automation can help your Procurement department enhance its sourcing activities
in a couple of ways. First, with all your payment activity electronically captured, they will have better information for supplier base consolidation analysis and other sourcing activities. Second, with a reputation for paying on time, or even having a mechanism to pay invoices early, and making it easy for suppliers to manage their accounts receivables with you, suppliers may be more willing to give your organizational preferential prices and terms.
Each of these steps is manageable and provides incremental benefits. Organizations such as Mears Group
have proved that the direct and indirect costs of traditional manual processing are just not necessary or acceptable anymore. The technology to eliminate the great majority of the paper handling is available, affordable, and easily implemented and integrated with your existing systems. And the benefits go beyond cost reduction to creating a cost management and information availability advantage that will help your company better competee.
Utilize invoice automation software
If your organization has yet to automate your Invoice processes
, you are likely unable to ensure complete Business Continuity. In reality, you can save $1000s and process invoices in days rather than weeks, allowing you to focus on driving your business forward. Spend Management solution providers such as Proactis are here to help you now, with Invoice Management solutions, you can:
Contact us today!
- Reduce Accounts Payable costs.
- Achieve 100% capture of all invoices from day one.
- Reduce manual entry errors.
- Improve supplier relationships.
- Benefit from early payment revenues with suppliers.
- Achieve improved cashflow.
- Improve audit visibility and reduce fraudulent activities.
- Convert any invoice format into an eInvoice using OCR (Optical Character Recognition).
- Seamlessly integrate with your Finance/ERP system for matching and approval.