5 Invoice Processing Bottleneck Situations And How To Overcome Them Through Technology
It’s a mystery why a number of companies still use paper-based invoice-processing when technology is at our fingertips. And, the side-effects of sticking to an outdated system? Lots of errors, lack of speed, and huge expense. Payment disasters can seriously affect a company’s bottom-line as well as its brand reputation. On the other hand, a one-time investment in invoice processing software can take care of almost all your accounts payable bottlenecks. Here are five manual invoicing bottlenecks and the ways you can overcome them by simply choosing to go paperless:
- Issues Relating to Paper
Paper-based invoices require the accounts department staff to manually enter invoice data in their finance systems. Now this is expensive, yet inefficient. With AP departments having to handle thousands of paper invoices every year, you cannot blame your staff, if they misplace and lose some of them, but consequences are always costly.
An automated, fully-digital invoice processing solution completely eliminates errors from the system. Electronic invoicing either scans the paper invoices or captures data through the optical character recognition (OCR) technology. All data thus captured are securely stored in a centralized location, so that the AP team can access them anytime online. This helps speed up the entire process.
- Issues Relating to Processing Invoices without Any Purchase Order (PO) Number
Sometimes, products or services are procured without a proper purchase order. Under this circumstance, finding out the person or department that authorized the purchase and then getting the payment approval become a challenge. This often leads to a long and erroneous approval process.
E-invoicing helps to automate the payment approval process, which leaves a digital trail, enabling the AP team to track back the invoices electronically. It helps streamline the search by allowing the staff to find out the authorized persons who normally handle such transactions.
- Issues Relating to Duplicate Invoices
Across the industries, duplicate invoices are the source of a big headache for all types and sizes of organizations. Duplicate payments are often the result of fraudulent activities on the part of unscrupulous suppliers. Duplication may also occur when suppliers send a second invoice for the same purchase due to a delay in payment. Sometimes, companies make double or more payments for a single purchase due to genuine mistake – done either by the supplier or by the account staff. These mistakes include typographical and data entry errors, among the others. They lead to unnecessary expenditure within the AP department, ultimately affecting the company’s bottom-line.
Going digital can save companies from committing such errors by setting up coding and authorization rules. Validation checks and matching criteria help prevent duplication in processing.
- Missing or Incorrect Line Data
When you do the job manually, there is a high risk of missing some of the line data. It is may also be not possible to spot incorrect data until it’s too late.
On the other end of the spectrum, an automated invoice management system helps avoid such discrepancies by facilitating validation checks at every phase of the processing, right from the scanning or electronic capturing stage. Automated data capturing rules out any possibilities of missed data or incorrect entries throughout the process.
- Missing/ Incorrect Items Adding up to Errors
When you miss out on some of the data or enter them incorrectly, the entire calculation goes wrong. The net result is rejection of the invoice, requiring your staff to do it all over again. This translates into loss of expensive man-hours, ultimately sending a jolt to your bottom-line.
When you are using an electronic invoicing system, anomalies are detected right at the start. Some issues are rectified automatically by the system, while issues of more complex types are flagged.
By investing in an invoice processing software, companies – both big and small – can avoid a plethora of payment processing bottlenecks. The rewards? Faster, error-free bill processing, timely disbursement of payments and an enhanced brand presence. Is AP automation worth your consideration? The answer is too obvious.