Tips for Efficient Invoice Processing
Manual invoice processing is tedious, time-consuming and error-prone. When you add missed discounts and the potential for fraud in approval processes, it can also be costly. Errors in quantity or price, invoice disputes due to wrong credits and payments, invoices submitted without purchase orders, duplicate invoices, errors in purchase order allocation and mis-matches in freight, are just some of the issues that your A/P department deals with daily. All of this makes the time and effort required to pay your company’s bills disproportionate to the actual number of invoices paid.
How You Lose Money on Invoice Processing
- Benchmark studies show the Cost of processing and invoice ranges from $24.00 to $1.70 per invoice!
- The MEAN Cost of processing a single invoice is $7.50
- Time to Pay a single Invoice is 24 to 9 days with and average of 16.1 days
- Less than 5% of invoices eligible for early discounts process in time to receive the discount
- Error rates on invoices average 3.6% with 2.1% undetected
- On average 0.3% of invoices paid are duplicates
- Cost of correcting each duplicate payment is $220.00
- On average vendor fraud cost the average small business $55,000.00 annually
- On Average 12% of duplicate invoices paid are due to mismatches in Master Vendor File
- Fraud is 3 times higher with an out-of-date Master Vendor File
It’s Not the A/P Department’s Fault!
Your employees are working hard…it’s not their fault that you lose money when they process invoices. The problem is the process! Yes, that’s right…the manual process is the problem.
You Can Stop Leaking Money from A/P
Automation allows A/P Personnel to manage the A/P process better, faster and more accurately, thus reducing fraud, waste, and managing income more effectively than doing head-down data entry. Automation can help you achieve:
- A 5% Reduction in Operational Cost, which equals a 30% Increase In Sales Revenue in terms of effect on bottom line.
- A 2% Early Pay Discount is equal to a 36% annual interest rate! This means that on a $1,000 invoice, you’d receive a $20 discount if you paid it within 10 days, so the math would look like this: (2/98) multiply by (360*/20) = 0.367, or 36.7%
What CEO or CFO wouldn’t want to stop these A/P losses?
Artificial Intelligence Brings Efficiency and Cost-savings to A/P
When artificial intelligence is harnessed to process the information on invoices and coupled with Cloud-based workflow system, invoice management problems are minimized and your A/P staff becomes much more efficient. Invoices are paid on time, discounts are taken, errors are reduced or eliminated and costs are cut.
Include All Your Departments in the Cloud
By relying on AI and Cloud technology that address not only A/P, but that are also equipped to handle a wide range of document management and data extraction situations, your company can drive efficiency and cost-savings across all departments, with one system. The benefits of a single system to manage all document types and all data types are enormous:
- Reduction of records management costs
- Improved business processes
- Better, faster customer service
- Instant, secure, online access to information
- Maintenance free
- Improved bottom line
You owe it to your company to see how artificial intelligence and cloud technology can save money.