Invoice processing represents a significant overhead for most businesses. For every €1 million in annual sales, a company can receive on average 5,000 invoices every year. The financial impact associated with such volumes of invoices is staggering when considering a processing cost of between €12 and €35 per invoice! Given the significant cost, it’s obvious that processing invoices quickly and accurately is crucial to reduce costs and improve key vendor relationships. The majority of invoices arrive in paper form, while others arrive via email attachment. The need to process both paper and electronic forms typically requires manual effort that is costly and prone to errors. That is, unless you have the right tools!
Why Automated Invoice Processing?
Automated invoice processing eliminates both the costs and errors of processing invoices in all forms, paper and electronic. Wrong or missing data is automatically flagged through built in exception handling tools. An automated invoice processing solution delivers:
- Reduced manual labour
- Elimination of errors and inaccuracies
- Better exception management
- Faster invoice processing
- Invoice approval workflow capability
- Remote invoice approvals workflow capability for non-office based staff
- Electronic storage of all invoices (paper or otherwise)
- Quicker access to invoice information via desktop
- Dramatic cost savings and increases in efficiency
- Improved relationships with vendors and suppliers
By implementing an automated document and data capture solution, your company can virtually guarantee a dramatic increase in productivity. The same volume of documents, and more, can be processed with far fewer staff members. The remaining employees can be better utilised in more business-critical tasks, which is another boon for productivity. Backlogs dwindle or disappear entirely. And with the process under control, time off and attrition have little effect on productivity.
How do I know if I need Automated Invoice Processing?
When I meet a potential client that has a problem with invoice processing or paper, I ask 4 simple questions to determine where improvements can be made:
- Do they have staff performing manual data entry of paper documents into an ECM, ERP or financial database?
- Do they have staff devoted to correcting human error due to the manual entry system?
- Do they think they will need additional staff over the next 2 years to handle increased manual processing?
- Are they incurring onsite or offsite storage costs?
It sounds expensive!
Of course an investment is required to move to an automated invoice processing system, but it is not as costly as you might think and a return on investment can be calculated quite easily, especially when you consider the direct cost savings of approximately 30%. Additionally, with the increase in efficiency and time savings, existing staff can be repositioned to more productive tasks. In summary, the typical return on investment is 6 months.
Want to see more?
Please contact me if you would like to see a demonstration of an automated accounts payable solution and how it could benefit your organisation.
Written by Nik Healy
Consultant and Advisor; Document, Content and Workflow Solutions at Pawpear
If manual processing of invoices is affecting your business please feel free to contact me. You can email me at firstname.lastname@example.org or call 01 296 5180. Other recent articles as well as details of solutions we deploy by role, industry or use case are available on our website www.pawpear.ie