The 5 Big Advantages To Faster Invoice Processing
The Accounts Payable Department might not be the most glamorous in a company. But it’s an essential part of doing business and we ignore it at our peril. In fact, the worst accounts payable issues can actually sink your company. That’s certainly not something you want to happen, especially when fixing those issues is relatively simple.
One of the big issues facing accounts payable is lengthy invoice processing. The longer it takes to process invoices, the more money it costs. And if the delays are long enough to put you behind payment deadlines you’ll be damaging your relationships with vendors. The most reliable way to speed up your AP process is with automation.
A study by Aberdeen Group found that automation can take invoice processing time in the AP department down from 20.8 to 3.8 days. That’s a 17-day difference! And not only that, but automation makes the average number of invoices processed per AP employee increase roughly five times. In other words, if you were processing only 1000 invoices per employee, automation can make that number jump to 5000 per employee.
But that just tells you how much time you can save. There are also five big advantages to faster invoice processing. Faster invoice processing helps save money, improves cash-flow, builds better relationships with your vendors, and frees up employees for other tasks. And when you automate, you’ll start noticing some pretty significant improvements right away.
1) Avoid Late Fees
When you’re processing paper invoices manually, it’s so easy to fall behind or misplace an invoice. You have invoices coming in on paper, by fax, through email, and a whole bunch of different electronic formats. Keeping all those different invoices straight and making sure you get all the data entered correctly takes up huge amounts of time. Before you know it, you’ve fallen behind on payments and have to pay a late fee on top of the amount of the invoice.
Of invoice automation’s benefits is that AP software helps you save money by keeping track of payment due dates. Not only does it speed up processing, but it also makes sure the invoices that are due first get paid first. Now, you’ll get your invoices paid on time every time.
2) Get Quick-Pay Discounts
Businesses are always looking for ways to save money. One that often gets overlooked is early payment discounts. In companies with a manual accounts payable process, it’s rarely realistic to commit to paying early. But automation puts those discounts within easy reach.
Keeping better track of payment deadlines and speeding up invoice processing doesn’t just help you avoid late fees. It also means you can take advantage of early payment discounts. Some vendors offer discounts if you can provide payment earlier than their other customers and these discounts can save your company quite a bit of money in the long run.
3) Keep Vendors Happy
Maintaining positive relationships with vendors, contractors, and other people your company owes payments is just good business sense. Faster invoice processing means they get paid sooner, which is always good for improving relationships. Depending on which industry you’re in, whether or not you have reliable suppliers filling your orders can make or break your business. Best to keep them happy.
Invoice processing software can also improve your customer service. With NextProcess’ AP Automation Software, you can set up a vendors’ portal to let your suppliers check on their own invoices’ status. They won’t have to take the time to pick up the phone and call your AP department hoping someone will be available to answer their questions in a timely manner. In this system, they get more convenient answers and you’ll have fewer calls to deal with.
4) Improve Cash Flow
Faster invoice processing gives you up-to-date information about where your money is. With automation, you’ll have access to more accurate reports and more complete information than is possible with a paper-based system. And automation doesn’t just make a little bit of a difference in this area. You’ll now have access to real-time reports from the accounts payable department.
Automation also improves accuracy and reduces or eliminates money lost to errors like duplicate invoices. It includes customization controls so you can automatically enforce company policy regarding cash flow. And that’s on top of reducing the processing cost per invoice, saving money by taking advantage of early payment discounts, and avoiding late fees.
5) Free-Up Employees
Automated invoice processing means your employees in the accounts payable department have time for things other than routine paperwork. No more manual filing, data entry, and invoice payments. They’ll still have to process exceptions invoices, but not many. Typically, you can get up to 90% of invoices processing on their own with automation software. And now AP employees will have plenty of time to process exceptions invoices quickly.
The AP automation software systems that include a vendor self-service portal are just as good for your employees as they are for your vendors. Reducing the number of customer service requests that come into the AP department makes a big difference in how AP employees can spend their time. With fewer tedious tasks to deal with, your AP employees will have a chance to focus on more important projects. And that has the added benefit of keeping them more engaged.
If you’re in the market for reliable AP software to speed invoice processing, get in touch with us. Our software gives you a scalable accounts payable workflow and keeps invoices moving quickly and efficiently. With NextProcess, you’ll realize accounts payment improvement from the moment you set it up. Plus we’re committed to making sure your software gets set-up right the first time and that it continues benefiting your company.