Invoice Processing Software – Major Business Benefits
According to IBM, Gartner and Aberdeen Group, between 75-80% of invoices in any business or organisation, are still processed manually - despite the advent of Electronic Data Interchange (EDI). These days, sophisticated invoice processing solutions are available to cut a swathe through the time and costs involved in handling supplier payments. Here is a summary of how they operate.
The Age-Old Problem: Cost Control
According to IBM, Gartner and Aberdeen Group, between 75-80% of invoices in any business or organisation, are still processed manually - despite the advent of Electronic Data Interchange (EDI). These days, sophisticated invoice processing solutions are available to cut a swathe through the time and costs involved in handling supplier payments and to enhance business workflow.
Invoice Processing: The Real Costs
With a manual system, hundreds – often thousands – of invoices must be reviewed and entered onto an accounting system, at massive cost in terms of labour, time and potential error.
Byline Group's research into Accounts Payable processing has shown that 90% of Accounts payable invoice processing involves keying data from paper; that the average time taken to process and Accounts Payable invoice is 12 days, and that 25% of all invoices are paid late.
Also according to Byline's research an accounts payable clerk handles just 70 invoices per day on average. Thus it is easy to put a labour cost on the front end processing. But the repercussions are felt further down the line too.
Invoice Processing Solutions: Key Benefits
Invoice processing solutions comprise software to allow invoice processing to be speeded up massively. This has a great impact on reducing accounts admin costs associated with invoice processing and also enables companies to make best use of any time critical payment times which may attract supplier discounts.
Automated invoice processing solutions allow a wide variety of typical invoices to be scanned at the same time and for them to be automatically reconciled against the original purchase order with minimal user intervention or data entry.
In essence, an invoice processing system uses sophisticated OCR (Optical Character Recognition) and data matching techniques
Invoice Processing Solutions:
The Basic Principal - The best invoice processing solutions will automatically scan, extract and validate invoice data and feed directly to an accounting system. Invoices come in a multitude of formats, layouts and styles from a wide variety of different suppliers. They can be machine printed or part handwritten, single or multi-page, coloured or white paper, and come from home or abroad.
However, all of these can be handled simply by scanning in a seed invoice and selecting the items of information that you want to capture. This is done by defining a target zone for each of them; the system will automatically distinguish between the field label e.g. VAT amount and the associated value. If you now select the supplier name as a unique attribute of all such invoices, every invoice from this supplier can automatically be recognised and processed and the captured data sent straight to the accounting system.
The challenges of identifying columns and lines of information, knowing where one item description ends and another begins, handwritten information, validation against almost any criteria or data values – all these are the remit of sophisticated invoice processing systems today.
Managing digitised invoices through the entire workflow approval process offers the potential for even greater efficiency and cost savings, and so it pays to check out software providers who can offer an interface with purchase-to-pay (P2P), Enterprise Resource Planning (ERP), Electronic Content management (ECM) and Document Management (DM) to offer integrated workflow solutions.
Invoice Processing: Summary Benefits
1. Removes the need to handle and store large volumes of paper
2. Increases staff productivity and reduce processing costs
3. Faster invoice processing improves supplier relationships
4. More up-to-date position of the business/organisation's financial position
5. Reporting on all financial transactions assists with compliance to appropriate Accounting Standards
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ABOUT THE AUTHOR
Jimi St. Pierre writes for several Office IT Equipment suppliers in the UK, including document management systems supplier Principal. The Principal Office IT Systems website can be found at => http://www.principalcorp.co.uk/