Hard-copy invoices get damaged, lost, misfiled, and sent to the wrong person all the time. And even if the right person does receive the paper invoice, it will still have to be manually keyed into a financial system.
Yes, 100% paperless invoice processing is the Holy Grail of accounts payable, but lucky for Accounts Payable (AP), you don’t exactly have to be Indiana Jones to find it.
Today, we’ll provide a step-by-step guide that explains how to achieve paperless invoices processing with specific tools to align to your unique workflows. As a bonus, we’ll even discuss how layering automation onto the paperless workflow can make your process truly effortless and efficient.
Use Paperless Invoice Processing and Prosper
There are lots of obvious benefits of utilizing paperless invoice processing. Fewer manual paper processes, more control over procure-to-pay, less file cabinets taking up space in your office, and no more paper cuts, all the while being green.
But the actual benefits your AP team will enjoy go much deeper than just the surface-level perks of not having to handle papers anymore. In fact, we’ve actually written a few posts with a lot more detail about how paperless invoice management can streamline your AP department, so we won’t get into them here, but in case you were curious:
- The Cost of Processing a Single Invoice is up to $30 — Here’s How to Cut That Cost by 90%
- How to Streamline Your Invoice Process — With a Flowchart
- Automated Invoice Processing Software & Invoice Automation Guide
- Convincing Vendors to Invoice Electronically: Have You Pointed out All the Benefits?
The key thing to understand is that paperless invoice processing is a stepping stone to digital transformation in accounts payable that can usher in incredible efficiency and accuracy, but first, you have to digitize. Here’s how it’s done.
Switch to a Paperless Invoice Process in 5 Steps
Before we get into the actual steps to go paperless, we’d be remiss if we didn’t offer a quick word on project planning. If you’ve worked in corporate environments long enough, you know it can be tricky to change a long-used process.
Set expectations – What will paperless invoice processing actually do for your organization? Reduce cost per invoice? Reduce invoice approval times? Reduce duplicate payments and fraud? Do your best to outline your expected outcomes.
Set goals – Do you want to go 100% paperless? If yes, you’ll need to get your vendors involved. Do you want to cut down on invoice approval times? If yes, benchmark your average days to approve an invoice. Be specific and quantifiable.
Set an implementation timeline – If your organization is sold on the two points above, bring home your vision for a 100% paperless invoice process with an implementation plan. With Stampli, you can be up and running in as little as one day!
All set? Great, here’s how to digitize your invoice process.
Step 1 – Capture
First things first—you need to get the data from the invoice into your digital system or AP Automation platform. In order to go 100% paperless, you’ll need to convert your invoices into a standard format.
With Stampli, have your vendors send or upload the PDF invoice into the centralized system. If your vendors are still using hard-copy invoices, you’ll have to scan them, but Stampli’s OCR will extract all the data quickly and accurately.
Step 2 – Code
Once you’ve captured the data, you’ll need to code the invoice against your general ledger. Rather than type it out manually, why not just set up your invoice management system to recognize your GL codes and categorize your bills automatically?
Yes, this is where “paperless” starts to become synonymous with “awesome” 🙂 .
Step 3 – Match and Verify
Most organizations have some form of internal payment controls that require supporting documentation, such as a purchase order (PO) that need to accompany an invoice. You could go searching through your file cabinet or email inbox for these documents, or if they’re housed in a central repository, you can use software to search invoices, open POs, and other docs to form a three-way match automatically—no paper, no fuss.
Step 4 – Approval
The approval process can be a massive bottleneck for accounts payable teams. It can be difficult to even find the right person to approve an invoice, much less having to chase them around via email and voicemail to receive it.
With a paperless invoice process, both the AP team and the approver (whoever that may be) can actually work together right ‘on top’ of the invoice to streamline the approval process. Imagine all your notes from emails, phone calls, texts, and in-person conversations all sitting right on top of the invoice in context so you can easily see the ‘full story’ of the invoice on one screen.
Step 5 – Pay
With your vendor invoice now verified and approved, it’s time to process the invoice for payment. And again, if all of this work you’ve done so far is stored digitally in a centralized system, invoices can be automatically sent into your financial system for payment.
If you’re still cutting checks manually, you’ll likely want to move to an electronic payment system such as ACH (automated clearing house) to make this a truly paperless process—especially when checks are not the preferred option. Keep in mind a study found that more than 75% of all businesses impacted by AP fraud were victims of check-related fraud. Therefore, when you prefer to pay specific vendors by check, ensure you have proper internal controls in place.
And that is how you take a (traditionally) paper-based invoice process into the digital age. There are plenty of AP Automation platforms out there that you can use to help you digitize your invoice management process, but one thing that truly sets Stampli apart is our focus on invoices. Many AP Automation platforms are really just outsourced AP solutions or payment companies disguised as AP software.
We recognized the need for a specialized tool to manage the invoice process with a level of detail and flexibility that didn’t exist at the time, and that’s how Stampli was born. Stampli is a cloud-based software AP Automation software that is designed to help you provide more control over invoice processing and also plays nice with your other financial systems.
Bonus: Integrate your ERP and Accounting Software
Having your invoice management and financial or ERP (enterprise resource planning) system connected is incredibly valuable.
Remember how we discussed how digitized invoices can be matched against purchase orders to help verify them? Well, that type of three-way matching takes place when systems are integrated.
So what’s the best way to tie all these systems together?
Many AP Automation platforms position themselves as the ‘Do-it-all’ solution for invoices, payments, accounting, etc. If they truly can do everything, there’s a very good chance that:
- The solution is rigid and may or may not conform to your organization’s practices
- The solution is heavily customized, which will be expensive to modify in the future
Using the ‘Do-it-all’ method technically works, but it’s not advisable for many organizations due to the lack of customization and ‘clunky-ness’ of the often dated system.
At Stampli, we offer dozens of integrations with systems you know and use like Sage Intacct, Oracle NetSuite, Quickbooks, and many, many more. By integrating with an existing tool, you’re able to run your accounts payable processes your way, instead of having to conform to what the do-it-all software is capable of doing.
Why reinvent the wheel? Plug your invoice management system into your financial system instead.
In addition to the current needs of your organization, choosing the right accounts payable automation platform also requires you to look ahead. If you add staff members or restructure your team, will it break your current software setup? Does the system you are considering have the flexibility to scale as your business grows?
Choosing a system that will allow you to process invoices your way and integrates with your tools and processes is incredibly important. Stampli’s AP Automation system works with your current and future systems and processes to create a streamlined invoice approval workflow.
Ready to talk? Chat with one of our AP Heroes today!