Despite all the talk about automating the Accounts Payable function, invoice processing tasks continue to remain stubbornly reliant on paper-based processes at a vast majority of companies.
More than three-quarters of the respondents in a recent survey by the IAPP said that a majority of invoices processed by their companies are paper-based. Of that number, close to 40 percent said that more than nine out of ten of their invoices are still on paper.
Given those kinds of numbers, it’s not surprising that invoice processing costs have not budged for years at most companies and neither have error rates for invoice entry and payments. Even today, despite the easy availability of automation tools, many companies do not even know how much they are spending on handling each invoice.
More than 50 percent of the companies that are aware of their costs say they spend between $2 and $15 per invoice. A handful of organization in the IAPP survey said they were spending an astounding $20 to $25 to process each invoice.
In many cases, an organization’s ability to pay invoices on time and manage the cash flow related to AP functions continues to be seriously hampered because of delayed invoice processing.
Clearly, companies that are hoping to get a handle on their invoice processing costs simply cannot afford the inefficiencies that exist with manual processes. Numerous solutions are available today that can help organizations capture and process invoices electronically right from the moment they are received to the point when it and are posted and captured in an ERP system.
These solutions include processes and tools that electronically capture, read identify and verify invoices, convert them to text-searchable format, match them with purchase orders, automate the dispute management and resolution workflow and export to ERP.
Implementing all of these technologies at once can be a big challenge especially for companies that have little automation in place right now. That’s one of the reasons why analyst firms such as Forrester recommend that companies implement invoice processing automation one step at a time beginning with document capture at the front end. To learn more about Frontend vs. Backend capture read my earlier post on the topic.
Yakidoo is helping organizations capture and digitize paper invoices as well as invoices received in other formats including those received via email or as PDFs, faxes and images. Automating this function alone can help companies eliminate costly inefficiencies that exist with manual keying and data entry.
For example, a Yakidoo Managed Solution can scan and capture paper invoices and send the data and the scanned document to a clients ERP system and content management system. This effectively removes the onus from staff to scan, index and store invoices so they can focus on more strategic tasks such as supplier relations and payment prioritization based on early payment incentives.
Similarly, automating the invoice matching process using tools help companies squeeze out some of the errors and inefficiencies that can crop up when trying to manually match each invoice with an associated purchase order.
Automated invoice matching can help companies make payments faster and take advantage of early payment discount opportunities. Enterprise Content Management systems provide another opportunity for companies to implement invoice process automation in manageable chunks. The key is to implement a solution that ties invoice processing functions with ERP systems for final payment.
Even companies that are unable or unwilling to automate their invoice processing functions have an opportunity to cut costs via outsourcing. Cloud and Managed solutions from Yakidoo and other companies allow companies to automate many manual invoice processing functions.
The benefits of such automation are manifested in multiple ways:
We’d also be happy to act on your behalf and get answers to the key questions and concerns you have about accounts payable automation. If you have questions leave a comment below, contact us through this web form, send us a Tweet or contact me personally on Linkedin. Help us shape the editorial agenda for this blog so you can get the most value out of what we produce.
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Alfredo De Vanna is CTO of Yakidoo. He has over 10 years of international experience deploying over 80 critical information technology and enterprise content management systems. He is fluent in English and Spanish.