Why You Must Automate Invoice Management
Traditional means of recording transactions is a hectic process that involves endless amounts of paperwork. It leaves both the buyers and sellers having to sift through a pile of hard copies for their personal records. However, a modern-day technique called automation has replaced this time-consuming and back-breaking toil. Read on to learn more about this new means of invoicing.
How A Supplier Invoice Works
A supplier or vendor invoice is an integrated software-generated invoice. It’s an itemized list of all transactions that take place between a buyer or a seller. Think of it as a sales bill or receipt issued by the supplying vendor. These documents will bring you a step closer to efficient supplier management.
Other than itemizing the transactions, a supplier invoice also lists the terms of the agreement between the transaction parties. In the case of a credit extension, the new supplier bill will list the revised terms of payment as well as the payment method.
Automating invoice management greatly improves your accounts payable process. This means that your business can boost the invoicing turnover ratio and achieve goals faster. Below is a detailed analysis of how the automation of these documents can increase business’ visibility and reduce costs.
Dealing with audits can be a painful process but automated invoicing can help. With the aid of software technology, you have the ability to generate financial reports in advance. Looking over the discrepancies in the report, business owners can make shrewd financial decisions for the future and get ready for audits.
It also makes the auditing process quicker. Businesses are often requested to produce necessary documents midway in the auditing process. With your system automated, you can access and dispatch these reports to the auditors much faster.
Easy and quick access to all necessary documents makes auditing a lot less cumbersome to the staff. Paper-based auditing can be a hassle for the AP staff. However, with the record of your transactions moved online, there’s no longer a need for scrambling through all the paperwork.
Save On Expenses
Invoicing automation helps your business with cost efficiencies in more ways than you can think. Did you know that 62% of the costs associated with your accounts payables are labor-intensive? These are costs involved in receiving, routing, and filing invoices. These also include clearing payments against the bills, reconciling the payment amount listed, and removing manual errors.
Much of the labor is invested in keeping track of the audits, missed payments, and the manual intervention needed for rectification of erroneous data entry. Since time equals money, small business owners with traditional paper-based invoicing systems lose out a lot in terms of their time-productivity.
Automation of invoices reclaims this time for your business’s staff. Less time is needed to keep track of payments and rectify invoicing errors. Therefore, you can focus on what really matters for your business.
Pay Your Bills On Time
The reputation of your business rests with the timely clearance of the invoices issued by your vendors. Missed payments and schedule disorganization not only affects the relationship between the transacting parties, but also the financial repute of your business.
In some cases, late payments may even cause you a sizable penalty. Continue with an inconsistent payment schedule, and you’ll lose your vendors in no time. When a vendor refuses to supply items out of the blue, replacements are less easily obtained.
However, with AP (accounts payables) automation you can throw that one hassle out the door. AP will boost supplier management in several ways. Automation increases the vicinity of your cash flow and keeps tabs on the payments that are due. With a clear blueprint of your billing status always at your disposal, it’s hard to miss payments.
Workflows are often interrupted and halted due to invoice incongruences. The discrepancy in a bill is a common result of manual data entry. Paper-based invoicing can easily result in misfiling or the loss of an important document. In any of these cases, the efficiency of your business is diminished by all the manual intervention required to omit errors and make replacements.
All of these unnecessary manual steps are nimbly removed through automation. It not only removes errors but creates room for labor efficiency. Your documents shift smoothly through the accounts payables (AP) process without getting caught up in the windmill of too much paperwork.
Additionally, with automated invoicing, you digitize what’s manually the most time-consuming process in invoice management: payment reconciliation. With your invoices automatically routed, approval is merely a matter of a few clicks.
The Bottom Line
Too often with traditional invoicing, auditing and invoice reconciliation come to an impasse. There’s no reason to put your workflow under such strain when proficiency can be just a few clicks away. Automating invoicing is a smart move towards improved business efficiency and considerable cost reductions.