The 5 Big Advantages To Faster Invoice Processing
Accounts Payable might not be the most glamorous department in your company. Nevertheless, it’s an essential part of doing business and you ignore it at your peril. In fact, the worst accounts payable issues can actually sink your company if left unattended. That’s certainly not something you want to happen, especially when fixing those problems is relatively simple.
One of these issues is lengthy invoice processing. This might seem like a relatively minor issue but it can have quite an impact on the department. Your cost-per-invoice gets higher and higher the longer it takes to process each invoice. If these delays are long enough to put you behind on payment deadlines, the problem can also damage 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.
How Much Of A Difference Can Automation Make?
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 (on average). That’s a 17-day difference! And that’s not the only change. Automation makes the average number of invoices processed per accounts payable employee increase roughly five times. In other words, if your department was processing only 100 invoices per employee each month, automation can make that number jump to 500.
These numbers are impressive, but they only tell you how much time you can save with automation. And time-saving is just one small part of five big advantages that faster invoice processing gives your company.
Faster invoice processing also helps your company avoid late fees, negotiate for discounts, build better relationships with your vendors, improve your cash-flow, and free up accounts payable employees for other tasks. Even better, 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 via 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 getting the data entered correctly takes up huge amounts of time. Before you know it, your department has fallen behind on payments and you have to pay a late fee on top of the amount of the invoice. For companies with slow and inefficient processing, these late fees can represent a significant loss.
One benefit of an 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 to make sure that they’re paid first. Second, the system speeds up automation so there’s no danger of things getting so bogged-down that you miss the payment due date. With accounts payable automation you’ll get your invoices paid on time every time.
2) Negotiate For Discounts
Keeping better track of payment deadlines and speeding up invoice processing doesn’t just help you avoid late fees. It also means you have the tools you need to negotiate with suppliers and vendors. Businesses are always looking for more ways to save money and this is one that people often overlook.
It’s often to your advantage to talk with suppliers and see if you can negotiate for discounts on bulk orders or for early payments. 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 and/or if you intend to make large orders. 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 implementing accounts payable automation puts those discounts within easy reach.
If your suppliers are not open to early payment discounts, there’s still a chance that you can negotiate for long payables terms. Then you can wait until the morning that the bill is due to pay, keeping the money in your company as long as possible. Either way, with business process automation, you can schedule payments so your suppliers are always paid on-time or early.
3) Keep Vendors and Suppliers Happy
Maintaining positive relationships with vendors, suppliers, contractors, and other people your company owes money 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 have the option to set up a vendors’ portal that lets 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 promptly. They can just look up the answer themselves.
When you automate your accounts payable department and speed up invoice processing, you’re making things easier for the people your company does business with. With this system, they get more convenient answers and faster payments and you’ll have fewer calls to deal with. In fact, offering supplier self-service is one of the best practices that can significantly improve accounts payable.
4) Improve Cash Flow
Faster invoice processing with accounts payable automation also gives you up-to-date information about where your money is. Automation systems give you access to more accurate reports and more complete information than is possible with a paper-based system. In addition, this information updates in real-time. You’ll always be able to log-in and see exactly what’s going on in the accounts payable department.
It’s difficult to overstate how much of a difference automated invoice processing can make in your company’s cash flow. With this system, the data you’re getting about your cash flow is more accurate, more complete, and much easier to access. As a bonus, data that’s easier to see and use makes audits much more simple.
Automation also improves accounting accuracy. The difference is so pronounced that automation can reduce or even eliminate money lost to errors like duplicate invoices. Plus, automation systems include customization controls so you can automatically enforce company policy regarding cash flow. And don’t forget that these savings are in addition to the money you save by reducing processing cost per invoice, 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 if the system is working properly there shouldn’t be very many.
Typically, you can process up to 90% of invoices without human help when you’re using automation software. This means that 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. By automating, you’ll be improving workflow as well as speeding up processing.
As we already mentioned, automation also helps with customer service. AP 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. This has the added benefit of keeping them more engaged, which tends to keep your employees happier in their jobs.
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 promised features or won’t work with your company’s existing ERP systems. And you don’t want to sign a 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 a reliable software supplier who can help you get accounts payable automation right the first time, 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 getting your new software up and running quickly and efficiently. We’ll also make 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 speeds up invoice processing. With NextProcess, you’ll realize accounts payment improvement from the moment you set up the system. And you’ll keep seeing those improvements for as long as you keep using our software. For more information, click here to get in touch with us. We’ll be happy to answer any questions and give you a no-strings-attached demonstration of how the system works.