Everything in business is automated these days, and that’s because it’s easier, it’s less expensive, and in most cases, it’s just a better system. There’s one area however where a lot of businesses large and small have been slow to adopt an automated process, and that’s invoice management.
Despite the reluctance to embrace invoice management technology, it’s one of the areas of automation that can be most beneficial to an organization. It can help streamline other aspects of the business related to invoice management and make your business leaner and more efficient overall.
The following are some specific reasons it’s time for your business to stop manually managing invoices and go with automated invoice management.
Manual Invoice Management Requires a Lot of Steps
In any situation in the workplace, when a lot of steps are required to reach the end result, it usually means not only is it time-consuming and there could be better places to put resources, but it also leaves more room for errors.
For example, with invoices, the steps include document preparation and routing, data entry, approvals and then several middle steps before filing is reached. Each step in this long process leaves more room for errors, and there can be any number of things that can derail the path of the invoice, resulting in payments that are late or missed altogether.
These scenarios are assuming the invoices are complete, and often they aren’t, so then the problems grow even more. When an invoice is received and it’s incorrect or missing information it just adds even more time to the process.
Unless you’re a business that loves spending money unnecessarily, then you probably are always looking for places to save and be leaner.
Invoice management is a great area to focus your efforts.
Let’s say to manually process one invoice costs your business $14, which is around the average. That adds up to huge costs over the course of a year, and that’s not even including the scenarios where problems arise.
Along with the costs that come with the processing of invoices, what about other potential costs? Examples include suppliers that charge fees for late payments, or added interest charges. There’s also the potential for things like double paying on duplicate invoices.
Manual invoice processing doesn’t just cost money. It requires a lot of other resources be dedicated to the process including your employees. There are a few ways to look at this.
First, if you want to have a leaner workforce having a big team of people working on invoice processing isn’t going to allow you to do that.
Also, you want your ROI for your human capital to be optimized, and if you have an entire team of employees working on entering manual data and pushing invoices through a long, outdated process, they’re not able to provide the most value. They could be putting their efforts toward other areas that would create revenue for your business.
Finally, visibility is essential. With a lot of paper documents being shuffled back and forth between employees and departments, there’s not only the possibility of things getting misplaced, but there’s no way to view invoices centrally and see what’s being spent and what’s happening. With automated invoice management communication is easier and more streamlined, and it’s going to help you spot potential problems that could be remedied to save money.