Your AP department is responsible for the entire scope of a payment’s life-cycle, which has its share of challenges and inefficiencies. Many of these problems begin with receiving and approving invoice payments. From costly paperwork to data entry mistakes, a lot can happen between receiving and paying an invoice to delay payment. Mistakes like these can cost your company a lot of money. Automation solutions can resolve these headaches and proactively solve problems through intelligent workflows, better invoice capturing technology, and automated routing. We have identified four major challenges your AP department currently faces and how your company can reduce or completely eliminate them.
Slow Approval Process
After your AP department receives an invoice, verifies its contents, and enters it into their accounting software, they then forward it for approval. An invoice cannot be paid until it is approved and may pass through half a dozen people before returning to the AP department. This is where the process can slow to a halt; with hectic schedules and changing priorities, an invoice could sit untouched for days. Since every invoice has a set deadline for payment, this delay can have significant consequences. Your company may be paying more for late fees and damaged vendor relationships by not improving this process.
Invoice processing, when automated, can help speed up the approval process and offer higher visibility to organization members. If your company can streamline its workflow, staff can review and approve invoices digitally in a fraction of the time it would take to do it manually. Invoices are less likely to be lost or misplaced, and at any time your AP staff can check the status of any invoice.
High Labor Costs
A large percentage of the total cost to process an invoice is related to labor. Your company is paying staff to manually review invoices, track data and code within the accounting software, route them interoffice to multiple people, and then file for easy access. Beyond that, it takes time and money to correct mistakes made during this manual process. High costs and inefficiencies present a challenge for the invoice process. ACOM’s AP automation offers the solution: reducing errors through data entry automation decreases labor costs, improved workflows improve productivity, and better archiving reduces the time it takes staff to search for information. Each of these components offers better company-wide visibility and guarantees faster invoice processing.
Delays Due To Missing or Hard to Find Information
When a vendor calls, you want your AP department to have information readily available. This is an area where keeping electronic records is better; if you keep and store paper documents, expect long delays while your AP staff tracks down invoices, relays information to the vendor, and then files it away again. This manual invoice workflow is inefficient and frustrating and is one of the many challenges presented by paper invoice processing.
With ACOM’s AP Automation solution, you can eliminate paper invoices and switch to an electronic method that results in better access to invoice and supporting documents. By utilizing invoice-scanning technology, ACOM quickly captures and digitizes invoice information into the format your business needs. No more hunting down documents: your staff can access historic invoice information right from their computer with improved archive and retrieval systems.
Paying invoices can be expensive, as demonstrated in the high labor cost section above. This cost grows higher when it comes to resolving problems caused by missed payments. Between late fees, missed early payment discounts, and bounced payment fees, a simple data entry error can end up costing your company a lot of money. These types of errors can happen from manual data entry problems, incorrect or insufficient invoicing information, or a delayed approval.
Automation resolves many of these headaches by improving workflows to speed up the approval process, automating data entry to avoid human errors, and verifying invoice information before it is routed. Your staff should not be wasting time hunting down a past-due invoice sitting in a department inbox. With intelligent routing systems in place, your AP department can track invoices throughout the company and check on statuses right away.
Solving Invoice Processing’s Biggest Challenges
Of the many challenges facing your AP department, the biggest issues are the ones that cost your company the most money. Luckily, there are automation solutions that can help resolve your slow approval process, lower labor costs, speed up information retrieval, and reduce late payments. Improve your company’s operational health by addressing these challenges; by boosting staff productivity and streamlining the invoice process, your vendors are paid on time, your company can reap the benefits of early payment discounts, and reduce costs by up to 90%.