4 Reasons to Automate Invoice Processing
History has witnessed that economies have been driven through positive transformations of trade and commerce because of enterprises that have taken the pioneer steps to embrace change.
Currently, the organizations that are being rewarded for their futuristic approach are the drivers of change who are either accepting the new age automation tools to conduct their workflows or better still the enablers of these disruptive forces that are moving the trends globally.
Some companies are looking at complete automation right from the way their employees sign in at work to how they handle critical business decisions based on multiple variables with varying uncertainties for numerous permutations and combinations that can be assessed in a short span only through business intelligence tools.
The advantages of automation are huge with an equal competitive edge, that will force every business to take a leap of faith toward the next biggest industrial revolution we are witnessing. Workflow automation can be carried out, as per the functional expertise while taking the services of the domain expert for different functions. AP automation software aids in robotic assistance of the accounts payable workflow for a business.
Bottlenecks to automation
- Ineffective change management
A business that is short-sighted will be worn out in no time. And the one that tries to use its weaknesses and threats as opportunities and strengths, ends up changing the definition of SWOT analysis. This fact has been the difference between winners, especially the black horses who had it all against them.
Assuming that automation can wait and is an expensive affair that cannot be undertaken in phases is a classic wrong move that can setback the business with its ability to stay relevant after a foreseeable period.
Automation needs to become every business’s priority to free employees from mundane jobs and help them focus on elevating their roles with tasks that need human intervention. Robotic automation closes the gaps in end-to-end processes with benefits that transfer to other workflows as a positive ripple effect. The business process automation is scalable and is built for continuous improvement. Even small and mid-size enterprises can start automating their processes in phases. They can invest in one primary function, and based on the ROI, the amount can be reinvested to automate the next process till everything is standardized.
Workflow of invoice processing
Invoice processing is an important part of accounts payable functions. In a business, it is imperative to both take and give credit. The vendors from whom a business purchases materials issue a credit line that needs to be fulfilled in time to avoid delay in payments or loss of trust with existing stakeholders.
Although a business may not intend to fall behind the schedule for its payments, there can be many instances when due to clerical errors, invoices are not processed properly and payments are not paid before the due date. Automation overcomes such discrepancies through a constant notification and reminder system that will aid in processing the invoices after cross-verifying them with purchase orders and order received statements.
Features of automated invoice processing
Invoices can be processed on auto-pilot when the entire workflow is integrated with existing software, third-party applications, and other linear tasks to allow smooth operation. The first step in invoice processing automation is data extraction which is aided by optical character recognition.
In simple terms, the scanned images of the vendor's invoices are mapped with the order received copies, purchase returns and purchase outward before recommending for release of payment. This process is a necessary step, for validation, as the amount in the purchase order can be more than the actual order received. Out of the goods that are received, few can be rejected and returned. Hence, the amount of payment that is usually processed adjusts these figures before releasing the funds. The right invoice processing tools are not limited to the mode of data storage and work for both paper and electronic formats.
Benefits of automating invoice processing
Automation of end-to-end processes has seen numerous benefits that have bewildered everyone. Here are some of the basic features that can be counted as automated invoice processing benefits:
The number of invoices that can be validated and processed by a computer is higher than by humans. Computers have better memory and the capacity to process repetitive tasks. Machines don’t get tired, and the process does not need a break. Invoices can be validated and processed round-the-clock through RPA. If you have noticed the central bank processing one of your payments at midnight, then you know that automated invoice payments are doing the job for your bank.
- Fewer errors
Automation removes errors as the process is set up as per the algorithm that is followed by the business applications. It takes care of all the aspects that are prone to errors of omission and commission through manual entry. As computers do not suffer from fatigue or tiredness, there are no errors in the robotic process automation of invoice processing.
- Avoid penalties
When there is a delay in payment, most vendors charge a fee as a penalty. This is common because in business terms time has value and a delay in payments is a loss of time that translates into a loss of money. When there are multiple incidents, there can be further repercussions such as losing the status of the preferred customer who gets the benefits of good deals and discounts.
With automation, all the files are stacked in the productivity tools in a master file with easy share transfer accessibility between all the collaborators. If payment validation is completed, the status of the task changes. In this manner, the stage for every invoice is identified and the number of invoices pending to be cleared is reflected on a real-time basis.
Establishing good vendor management is essential for business. This aspect becomes easy for employees of the accounts payable team to handle as they have more time at hand to spend on value-centric efforts with automated invoice processing systems. Getting end-to-end automated invoice processing software is a good investment for a business of any size.