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You might already have a sneaky suspicion that your invoice processing procedures are outdated, slow, and prone to errors. If you can answer yes to any of the points below, your business can benefit from AP automation.
1: It Takes More Than Thirty Days to Process an Invoice
Vendors specify time periods for reimbursement of invoices. When it takes more than 30 days to process invoices, late payment penalties may accrue as well as interest on the unpaid amount. When you fail to pay invoices in a timely manner, it costs your company money for nothing.
This is a bright, red flag that there is a lot of room to optimize and automate your AP processes.
2. Audit Trails Are Paper-based and Hard to Follow
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If you are still using paper invoice processing, or even relying on email attachments, things can be missed or misplaced. Even if you have a great filing system, that’s no guarantee that someone will be in the office to retrieve the paper copy, the file is corrupted, or some other mishap occurred.
Businesses sometimes make the mistake that an inaccurate audit trail is an individual agent’s fault. While that’s certainly so for each case, the root of the problem is the process not your team. When a process is at fault, it’s time to change the process.
3. You Lose Time on Paper Document Handling
It’s commonly said that time is money, and that’s evident in paper-based accounting procedures. It takes humans exponentially longer to enter data and check invoice information than optical character recognition or OCR technologies.
Humans are an important part of AP. For example, oversight and data analysis are two key functions of AP professionals, but the time-consuming, tedious steps around processing paper invoices is a drain on your team and your bottom line.
4. Approvals From Management Are Taking Too Long
If you have a logjam at the approval stage, this is a sign that you’re not working efficiently. There are a couple of reasons for this. First, this means that the manager is choosing between high value work and the transactional work that is approving invoices. The invoices are losing out! The other reason is that slow manager approval is an indication that your AP process is error prone. If the manager could breeze over invoices and rubber stamp it, they would get done quickly, but slow approvals indicate the manager needs to go over invoices with a fine tooth comb and consistently needs to make corrections.
Giving approvers an easy to use system that makes invoice approval fast and easy will result in faster approvals. We know everyone gets busy and sometimes a gentle reminder is needed to invoke action. Automated system reminders can be sent without AP staff having to constantly reach out to approvers or executives asking for invoice approval status.
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5. It’s Hard to Find, File, and Retrieve Documents
Paper-based systems take up lots of space. They also require your team to be physically present and will need to manually sort through files to find documents. If you have documents stored off-site and those documents need to be retrieved on a regular basis, this is doubly time-consuming. Creating digital documents and storing them so that they are easily searched and found is an important part of invoice processing automation because it eliminates nearly all of the time that it takes to find, file and retrieve documents all while freeing up space for your business.
Did any of these time-wasters resonate with you? If your business is slowed down by paper-based document retrieval, management approvals, manual document handling, confusing audit trails, or regular late payment fees from vendors, know that there are solutions that resolve these business challenges.