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The accounts payable (AP) department plays a major role in the everyday operations of any business or organization. Responsible for managing administrative, clerical, and financial procedures, the AP department oversees supplier payments, bills, invoices, and more.
Unfortunately, many AP departments still use outdated methods to carry out invoice processing. It can take anywhere from 15-60 days for an AP department to complete an invoice. Why? Incorrect or incomplete invoices passed down from other departments can easily slip through the cracks. In fact, more than 23.2 percent of invoices involve exceptions, and remedying these exceptions can take up to 24 percent of an AP worker’s time.
How can the right invoice processing system reduce the rate of exceptions?
Exceptions include any situation in which the presented invoice data doesn’t align with the company’s expectations. This can be due to discrepancies between purchase orders and invoices, supplier mistakes, lack of purchase orders, invoice approval process bottlenecks, failure to deliver goods or services, coding errors, and more. If a discrepancy falls within a certain limit, some invoices may still be processed. However, even small exceptions can add up to significant costs.
Invoice processing involves the procure-to-payment procedure of managing invoices for an organization’s vendors and suppliers. Due to silos within an organization, effectively managing modern invoice processing or aligning with digital procurement can be frustrating for AP departments. For example, if a business orders 10 items but its supplier only sends five, the responsibility falls on the AP department to reconcile the issue or chase a person down—often an extremely time-consuming task.
Additionally, procurement and accounts payable teams often spend their time seeking out approvals, working with scanned documents, and troubleshooting non-PO invoices.
The right invoice processing technology should automate invoice data capture, identify exceptions and route them to the right person, run approval workflows, ensure accounting is applied correctly, and more. The technology should identify and autofill the necessary information to streamline and simplify the “OK-to-pay” process, reducing inefficiencies often linked with manual invoice management and insufficient supplier information.
With the ability to scan and read documents, Vroozi Intelligence eliminates or reduces the need for data entry, which is prone to errors or mistakes. By identifying an invoice’s purchase order (PO) number, Vroozi Intelligence can process more invoices straight through for Touchless AP. Vroozi can also scan, capture, and analyze non-electronic invoices. For non-PO invoices, Vroozi uses AI to apply historical data to understand how it should be coded, ultimately saving the AP department valuable time.
Touchless intelligence can automate and simplify AP tasks.
Straight-through processing (STP) automates payments or financial transfers without manual input. Each purchase order must meet a two- (i.e., purchase order and invoice) or three-way (i.e., purchase order, goods receipt/service entry, and invoice receipt) match requirement before it can be approved for payment.
However, POs are often a challenge to implement. They require a great deal of work, and many employees are intimidated by the systems used to create and manage POs. Software like Vroozi delivers a no-training process based on the user’s knowledge of online shopping to make it easy to create purchase orders. This puts companies in the best position to realize more touchless AP processes.
How can you start implementing automated invoice processing?
Companies may not mind the current state of their accounts payable or invoice processing procedures until issues arise. Fraudulent invoices, data entry errors, or inefficient procedures may have a domino effect, leading to late payments, high costs, or an impact on the company’s brand.
Software like Vroozi’s procure-to-pay platform helps break down silos within organizations by improving communication with both internal departments and third-party vendors.
How? Suppliers can help businesses innovate and improve costs. Open communication with a supplier allows businesses to identify better options in the form of cheaper parts, cost-effective purchasing, and more. A platform that enables continuous communication between suppliers and their business partners can boost ROI and save resources.
It’s crucial to understand your current company’s needs before implementing automated invoice processing. The following steps can help:
- Ask: What does my company need? What’s your organization’s current protocol for handling invoices? What does the verification process involve? How much time does it take?
- Record all invoice data fast and accurately. Scan and organize all physical documents. Create well-defined procedures for handling invoices.
- Select the right platform. Software like Vroozi Intelligence uses automated data capture to improve invoice matching and coding, exception handling, approval workflows, and more.
- Connect with suppliers on a platform. What are the benefits of using a new accounts payable invoice automation (APIA) platform? How will it allow suppliers to save money and time and reduce costs?
- Use analytics to identify pain points. After you’ve implemented your invoice processing software, use data to gather valuable insights into processing time or areas for potential fraud.
Interested in learning how automated invoice processing can benefit you? Vroozi can be integrated with many leading enterprise resource planning (ERP) and financial systems. Vroozi offers more than just control and visibility, with operating features that include mobile UX, standardized integrations, and fast deployment times. Book a demo today!
