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 can’t afford to ignore how important this department is. Problems that start in AP can quickly become very serious. 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 problems is relatively simple.
One of the big issues facing accounts payable is lengthy invoice processing. The longer it takes to process invoices, the higher your cost-per-invoice gets. And if the delays are long enough to put you behind on payment deadlines you’ll be damaging your relationships with vendors. Clearly, you need a way to speed-up your invoice payment system. The most reliable way to do this is with automation.
A study by Aberdeen Group found that automation can take invoice processing time in the accounts payable 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 your department was processing only 1000 invoices per employee, automation can make that number jump to 5000 per employee.
But these numbers just tell you how much time can save with automation. There are also five big advantages that faster invoice processing gives your company. Faster invoice processing helps save money in more ways than one, improves your cash-flow, builds better relationships with your vendors, and frees up accounts payable employees for other tasks. And you don’t have to wait long to start noticing these improvements. With the right supplier, AP automation is easy to set up and you’ll be able to start using it right away.
1) Avoid Late Fees
When you’re processing paper invoices manually, it’s very 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. A system like that doesn’t make it easy to process invoices quickly.
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.
One benefit of an invoice payment automation system is that AP software helps you save money by making your payments on time. This is a two-fold process. First, the automation system keeps track of the invoices that are due first so they’ll get paid first. Next, the system speeds up automation so there’s no danger of things getting so bogged-down that you miss the payment due date. Now, you’ll get your invoices paid on time every time.
2) Get Quick-Pay Discounts
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. Businesses are always looking for more ways to save money and this is one that often gets overlooked.
Your suppliers benefit from getting the money for their goods in a timely manner. If you ask, some vendors will offer discounts if you can provide payment earlier than their other customers. These discounts can save your company quite a bit of money in the long run.
In companies with a manual accounts payable process, it’s rarely realistic to commit to making early payments. You don’t want to risk falling behind and damaging your relationship with suppliers. But accounts payable automation puts those discounts within easy reach.
3) Keep Vendors and Suppliers Happy
Maintaining positive relationships with vendors, suppliers, contractors, and other people your company owes payments to 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. It’s best to keep them happy.
Invoice auto-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 accounts payable department hoping someone will be available to answer their questions in a timely manner.
When you automate your accounts payable and speed up invoice processing, you’re making things easier for the people your company does business with as well as your own employees. In this system, they get more convenient answers and faster payments 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. Automation gives you access to real-time reports from the accounts payable department.
The difference that an automated invoice processing system makes in this area is hugely significant. The data you’re getting about your cash flow is more accurate, more complete, and much easier to access. And accounts payable automation’s benefits go beyond making data easier to see and use.
Automation also improves accounting accuracy and reduces or eliminates money lost to errors like duplicate invoices. Plus, it includes customization controls so you can automatically enforce company policy regarding cash flow. And all those savings are in addition to the fact that automation reduces the processing cost per invoice and lets you save 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. Now accounts payable employees will have plenty of time to process exceptions invoices quickly. Plus, the tools that make auto-processing work so well are available to your employees when they handle the exceptions invoices. And having the right tools for that job makes a huge difference.
Automation also helps with customer service. The AP automation 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 accounts payable department makes a big difference in how AP employees can spend their time. With fewer tedious tasks to deal with, your employees will have a chance to focus on more important projects. And that has the added benefit of keeping them more engaged.
Take Advantage Of These Benefits With The Right Supplier
Accounts payable automation can offer many benefits to your company, but you have to choose your software supplier carefully. Not all AP software is created equal. You don’t want to get stuck with a program that doesn’t include all the features you were promised or won’t work with your company’s existing ERP systems. And you don’t want to contract with a company that has poor customer service, charges hidden fees, or can’t keep your information secure.
If you’re in the market for reliable accounts payable software to speed-up your invoice processing, look no farther than NextProcess. We have an implementation rate near 100%, which is far higher than the industry standard. Once you sign-on with us, we’re committed to seeing your implementation through to completion and making sure everything continues working just the way you need it to for as long as you have our software. And that includes integrating with your existing ERPs.
Our invoice processing system gives you a reliable accounts payable workflow that scales to your needs and keeps invoices moving both quickly and efficiently. With NextProcess, you’ll realize accounts payment improvement from the moment you set it up. And you’ll keep seeing those improvements for as long as you keep the software. For more information, get in touch with us. We’ll be happy to answer any questions.