According to a recent survey from the Institute of Finance and Management (IOFM), more than two-third of all annual invoices are still processed manually. Paper documents are still sent back and forth, faxed and e-mailed documents still require manual handling. In the age of cloud-based invoice approval, this is a major anachronism, and one that hurts companies.
The True Cost of Manual Accounts Payable
According to similar studies, 62 percent of AP costs come from labor. When you stick with manual processes, you’re adding time and effort to your AP approval process. Then you need to send these invoices out for approval, which is where the real time suck and risk of losing comes in. Whose desk is it sitting on? Are they waiting to get an answer back from someone else about this invoice before they can even approve it? A lot of times AP can’t even see the real reason behind the holdup. All the paper shuffling means a lot of work for little actual benefit.
With manual processes, tracking invoices efficiently can be very difficult. Without a cloud-based approval system, you have to constantly stay on top of invoices that may be in dozens of places, being worked on by any number of employees. It’s a challenge, at best, to try to get any sort of real-time analysis of how AP is functioning.
All that extra work and lack of visibility eats time. This can cause delays that can not only cost you time and money, but potentially damage your most important vendor relationships. Then you still need to manually enter the invoice data into the ERP and file the invoice.
That’s a lot of unnecessary work in an age when cloud-computing and automated software exists to streamline the entire process. With a centralized, cloud-based database, you eliminate the risk of duplicate or lost invoices. You speed up invoices for your vendors and slash the risk for late payment fees or unhappy vendors due to delayed processing times. It’s an incredible efficiency boost for your company.
Four Reasons to Take to the Cloud
- Cloud-based digitized AP allows you to log invoices automatically – optical character recognition allows you to extract text directly from invoices, reducing the chances of manual data entry error. It allows you to automatically match invoices with POs, forwarding them for approval to the proper authorities. Also, it allows you to archive your invoices, receipts and other proofs electronically, without taking up any physical space.
- Vendor portals allow suppliers to have superior visibility into your process. You can flag specific types of invoice or behaviors so you get instant, real-time notifications when potential problems occur. You can develop reports more quickly, giving you a faster and more accurate picture of your company’s cash flow.
- Cloud-based digitized AP allows you to better control your spending. It reduces risk of duplicate payments, and increases audit readiness. It’s simply the best modern way to manage your accounts payable processing.
- Modern cloud-based solutions are extremely simple and intuitive to use. Set-up an organization-wide system in minutes, with easy integration into existing ERPs and without significant training. It’s the best investment you can make into your AP process.