By Denny Hammack
Chances are, your accounting department receives invoices in many different ways, such as mail, email, fax, etc. Yet, no matter how they are received, it is important to process invoices quickly and efficiently. This is one of the main roles of an accounts payable (AP) department.
In the not-so-distant past, all invoice processing tasks were completed manually. This meant that an AP expert had to process every invoice, make sure it was paid, file the documents, record the payment in the bank books, and follow up to make certain that the payee received it and noted it on the account. Later, some of these steps may have been automated, but the process still had to be completed by hand. Though today, there are automated options that can complete all of the steps at once — reducing the labor required by your staff. To determine if this is right solution for you, here are a few differences between manual and automated invoice processing:
- Productivity — With automated invoice processing, AP employees do not have to handle every invoice multiple times. This means they can concentrate on making certain other tasks are completed successfully. The amount of work done in the same amount of hours will skyrocket for many organizations. With manual processing, productivity can often lag — especially during busy periods.
- Eco-friendliness — While an organization cannot control how invoices are received, it is possible to reduce how much additional paper waste is generated. Automated processing is done mainly online and is paperless. Manual processing may require multiple sheets of paper, as well as ink to complete just one invoice.
- Costs – According to a Wall Street Journal article, writing a check can cost a business between $4 and $20 — and processing an invoice in full is even more than that. An automated system can make it easier to generate electronic payments or streamline the process of creating paper checks, helping to lower costs. While there may be an upfront cost to getting started with an automated system, over time the savings can be great.
- Data Recall — With a manual invoice processing system, it is up to the AP professionals to remember important data from invoices. In an automated system, this aggregated data is available at the push of a button. Plus, detailed data can be skimmed — something that is useful in many organizations.
- Error Rate — Even the best AP professionals will occasionally make mistakes. An automated process offers the best of both worlds. Not only will it have built-in error checking functions, but your staff will have more time to double-check the work and make sure no mistakes are made.
- Ease of Access — Getting to a paper invoice in a hurry may not always be easy. If you need to access an older file, it could be stored under massive piles of newer documents. However, with an automated solution, you will always be able to access old invoices online. This can make tax time much easier.
- Integration — When adding more and more automated solutions into your office, working with outdated, manual systems becomes more complex. A good, modern automated invoice processing system will work with your accounting software, tax software and any other product used on a daily basis.
Once you understand the differences between manual and automatic invoice processing, you will see why an automated system is often the most beneficial —especially when moving toward a more automated (i.e. paperless) office environment. It could be time to consider available options and make a few changes that will bring your AP department up to date with modern technology.
Denny Hammack is the CEO of FileSolve, an industry-leading provider of electronic document management solutions. FileSolve provides software & traditional services to a wide range of industries and departments throughout specific U.S. Markets.