According to recent research from the Institute of Finance and Management (IOFM), more than 75% of all annual invoices are still processed manually. Many businesses have implemented strategic initiatives to reduce costs and better manage discretionary spending. However, paper documents are still sent back and forth, and faxed and e-mailed documents still require manual handling.
The True Cost of Manual AP
Another similar study shows that, on average, it takes businesses more than $6 to process a single invoice. But those costs are the tip of the iceberg. Paper-based and semi-automated/legacy invoice processing create hidden costs that chip away at profit margins:
- Manual processes
- Processing errors and exceptions
- Poor cash flow visibility
- Poor spend management
- Onerous regulatory compliance
- Risk of fraud
- Fragmented systems
It’s no secret that when you add time and effort to your AP approval process when you stick with manual processes. Then you need to send these invoices out for approval – which raises questions. Whose desk is it sitting on? Are they waiting for an answer from someone else about this invoice before they can even approve it? A lot of times, AP can’t even see the real reason behind the holdup. All the paper shuffling means a lot of work for little actual benefit.
With manual processes, tracking invoices efficiently can be complicated. Without a cloud-based approval system, you must constantly stay on top of invoices in dozens of places, being worked on by any number of employees. It’s a challenge, at best, to try to get any real-time analysis of how AP is functioning. All that extra work and lack of visibility eats time and money.
That’s a lot of unnecessary work in an age when automated software exists to streamline the entire process. Moreover, a centralized, cloud-based database eliminates the risk of duplicate or lost invoices. You speed up invoices for your vendors and slash the risk of late payment fees or unhappy vendors due to delayed processing times. It’s an incredible efficiency boost for your company.
Three Reasons to Consider Cloud
- Cloud-based digitized AP allows you to log invoices automatically – AI-powered solutions enable you to extract text directly from invoices, reducing the chances of manual data entry errors. It allows you to automatically match invoices with POs, forwarding them for approval to the proper authorities.
- Cloud-based digitized AP allows you to control your spending better. It reduces the risk of duplicate payments and increases audit readiness. It’s the best modern way to manage accounts payable invoice processes.
- Modern cloud-based solutions are straightforward and intuitive to use. Set-up an organization-wide system in minutes, with easy integration into existing ERPs and without significant training. It’s the best investment you can make into your AP process.
Accelerate Your Invoice Workflow with Itemize
AP automation allows small and mid-sized businesses to turn supplier invoices into a competitive advantage. With end-to-end visibility, audit-proof records, reduced costs, and time saved, an effective invoice workflow allows you and your team to focus on critical objectives rather than repetitive, low-level tasks.