By Paula Loverich, Marketing Manager
Electronic invoicing and automated invoice workflow reduce operating costs by providing added efficiencies in the AP department. Your skilled workers need to focus on more strategic issues that help drive your business. The following excerpt from the PayStream Advisors Invoice and Workflow Automation report details the challenges in managing your invoice process which can be reduced with invoice automation.
Paper invoices are the enemy of efficiency in the Accounts Payable department. This challenge is further compounded by the fact that invoices are rarely sent directly to the AP department. In many cases, suppliers send invoices to buyers in the purchasing department or directly to field approvers. If a company has multiple buyers in multiple locations, tracking down an invoice for on-time payment becomes even more difficult. Often times an invoice will sit on an approver's desk for a week or two, without even being entered into the accounting system. Routing of invoices in paper form is time consuming and leads to other problems downstream. Worse yet, some companies don't even have a formal policy that specifies where invoices should be sent and routed, which can result in a number of problems, including:
- Management does not have visibility into all of the company's outstanding liabilities when making investment and borrowing decisions.
- Invoices are beyond the discount period by the time they are entered into the accounting system and are ready for processing.
- Suppliers could cut off inventory or put your company on credit hold because invoices are late and not paid on time.
- Invoices not paid on time increases the potential for duplicate invoices if the supplier sends a second invoice.
The fact that the majority of invoices are received in paper format and require manual data entry is the number one challenge in the invoice management process, see Figure 2.