Does it cost 50p or £50 to process an invoice? The effect of digital invoice processing on Accounts Payable costs.
Digital invoice processing reduces Accounts Payable costs
Accounts payable (AP) was among the first departments to adopt digital document management to streamline the payments process. For more than twenty years Document Logistix has helped Accounts Payable teams to capture information in multiple formats, paper and digital, and index it for the Accounts workflow.
AP workflow consists of multiple checkpoints such as ledger entry, queries, invoice approvals, expense approvals, payment scheduling, records keeping and archiving. At each point in the process payment may need to be checked against supplementary information, such as a valid Purchase Order, all of which can be implemented according to your company’s rules and procedures.
By using Document Logistix automated document management and imaging solutions, organisations are assured of greater control of documents and processes, as well as enhanced visibility and compliance.
Benefits for the Accounts team and the business
The return on investment for companies that are upgrading to electronic document management or installing new systems can be measured easily in simple efficiencies.
AP teams using an electronic system save on historically time-consuming data entry, eliminate lost documents, overcomes delay in authorisation of invoices, gain highly efficient filing systems, and eliminate the need for expensive, non-secure physical storage space. AP staff can concentrate solely on their core duties and become far more productive.
Businesses whose AP department uses electronic document management enjoy greater information security, are better able to meet governance and compliance requirements, while on a daily basis management has access to up-to-the-minute reporting that typically takes days to achieve without a digital system.
Whether you are looking to reduce the costs associated with invoice processing (see facts and figures at the bottom of this page) or to gain additional business benefits, talk to Document Logistix about the best ways to achieve your goals in AP.
Managing large Accounting document volumes
Any size of business benefits from Accounts Payable electronic document and information management.
Document Logistix core Accounts Payable solutions helps large companies to manage the complexities of high document volumes in a multi-faceted business. For example, in the case of logistics, procurement, manufacturing and supply chain businesses, Accounts Payable has to manage large numbers of support documentation, such as GRNs, PoDs, origination and quality documents.
Document Logistix also provides smart entry level systems for smaller businesses that help to automated daily, monthly and annual Accounting tasks.
Automated events and escalation in the AP workflow
Managers can pre-set how important matters are escalated in the event of a payables issue, in order to avoid process bottlenecks and delays. An automated alert can be set for any payables situation that needs detection or that could affect the smooth running of the business.
Secure access from any location
Document Manager is entirely permissions-based so that staff in the AP team only have access to their areas of operation, according to set access levels.
Document Manager is centrally controlled and accessible from multiple locations, including from mobile devices, which is a valuable time-saver for staff working remotely or at customer sites.
Efficient and virtually error-free AP processes
For Accounts Payables teams, electronic document management is a great efficiency tool that allows everyone in the process to access information and focus on Accounting, rather than waste time hunting for information. The addition of a define AP workflow and automated AP components reduces the potential for human error and keeps the company’s Accounts running smoothly.
Reporting, audits and Accounting compliance
Organisations require regular management reports from the Accounts department. With an electronic system, reports can be generated simply at regular intervals or on demand. Reports can be distributed electronically immediately or posted to a secure online portal.
The fact that Accounts records are stored and maintained electronically, together with a full record of what files were accessed when and by whom, makes it far easier to satisfy audit requirements and compliance becomes relatively straightforward.
What should your invoice processing cost be?
According to research and analysis group, Gartner, typically the cost of processing an invoice in the UK ranges from £4 to £25, and in some cases is as high as £50, per individual invoice.
Around one third of companies are not able to determine the amount of their invoice processing cost, according to a 2015 survey, yet findings suggest that the cost of invoice processing using procedures without automation tools can be up to 20 times higher than processes that are automated.
Many businesses are losing money either because of high processing costs or because of slow payment and collection processes that have an impact on client and supplier relations.
Moving to paper-less systems for Accounts Payable processes achieves rapid and substantial benefits in cost savings as well as management benefits such as improved cash management simpler matching and approval.
Reduce invoice processing costs to 50 pence per invoice
When AP and AR functions are automated, you gain:
- Improved efficiency in invoice management (document imaging, data extraction, electronic approval workflows)
- Reduction in external/internal enquiries (PO matching, electronic workflows)
- Improved reconciliation and ledger management (automated document matching, cash flow forecasting).
Document Logistix AP solution reduces the time taken to input invoice data by 80-90%. Our document archiving solution makes filing and retrieval time virtually instant. Authorisation is a simple automated process.
Taking into account the costs associated with data entry, manual matching, printing, filing and archiving, we typically see a reduction of the cost of invoice processing to about 50 pence per invoice, after Document Manager is implemented.
For more on Accounts document management, to join us on one of our regular webinars or seminars contact Document Logistix