One of this year’s blockbuster movies finds the protagonists racing luxury cars across the icy expanse outside a Russian base while being shot at by the bad guys and chased by a nuclear submarine.
If you think that setup is unbelievable, consider how much time organizations spend approving invoices. It takes accounts payable departments with no automation an average of 14.3 days to process an invoice, per PayStream Advisors’ 2015 Invoice Workflow Automation Report. Semi-automated accounts payable departments take an average of 8.8 days to process an invoice.
Hardly fast or furious.
Approving invoices in a manual or semi-automated environment includes a lot of keying, paper handling and routing, supplier inquiries, document filing and retrieval, and searching for lost or misplaced invoices. Making matters worse, up to 28 percent of invoices contain errors that trigger more manual processes and back-and-forth e-mails and phone calls between buyers and suppliers, Aberdeen Group finds. Once invoices are approved for payment, accounts payable departments typically key the invoice information into an enterprise resource planning (ERP) or general ledger (GL) system. The accounts payable department also must collect and track supplier payment and tax information. Later, completed payments are manually reconciled with data in the ERP or GL system.
It is no surprise that most businesses capture less than 21 percent of all early-payment discount offers, or that time management and on-time payments are the top concerns of 25 percent of accounts payable organizations, according to research from the Institute of Finance and Management (IOFM).
Fully automated accounts payable solutions put invoice approval into high gear by automating:
- Invoice receipt and validation
- Extraction of invoice header and line-item information
- Matching of invoices with purchase orders and/or proof-of-delivery documents
- Routing of invoices for approval and exceptions handling
- Collaboration between internal stakeholders and suppliers
- Posting of approved invoice data to downstream systems
- Retrieval of invoice images and data
On-the-go purchasers and managers can approve invoices using a smartphone or tablet. It is for these reasons that organizations with fully automated systems process invoices in an average of 3.7 days.
Does your accounts payable process have a need for speed?
If so, Nexus wants to talk to you! Contact us to see what we can do for you.