Manual Invoice Processing? The Cost And How To Fix It.

Finance teams know that controlling supplier costs is critical.  But one area that many companies have yet to address is the actual cost of processing the supplier invoice from receiving them to approval and then payment.

So what is the cost?

PayStream Advisors research reveals the average cost of manually processing an invoice can be as high as $20, versus $4 for automated invoice processing. 

So if your company is processing 300 invoices a month manually you’re probably wasting at least $50,000 a year.  Are you a manufacturer processing 1,000 invoices a month?  Then it can be a whopping $192,000.  

Can your company afford to process invoices the old way?   Reach out to us today and we can show you how you can transform your processes and save money.

The Problem

So why is this process so expensive, and how can it be reduced?

Firstly, invoice processing can be a very time-consuming and labour-intensive process.

Invoices first need to be received and entered into the system (which in itself can lead to huge delays, as supplier invoices may sit for days or weeks in recipients’ inboxes before even reaching the AP team).

They then need to be coded appropriately, submitted for budget-holder approval and then entered into the ERP system for approval. The opportunity for delays (and also the need for the AP team to chase individuals) at every stage is considerable.

And this assumes a relatively smooth process, but there can be other potential issues:

• invoices get lost or forgotten before they even reach AP
• delays lead to duplicate invoices being issued and processed
• correct approvals processes are bypassed
• suppliers impose late-payment fees or interest charges
• Duplicate invoices paid twice
• early payment discount opportunities missed

These are just some of the easy to recognise problems that manual invoice processing presents.

Issues such as non-compliance with budget and approval parameters, fraud and incorrect budget allocation may not be as easy to immediately track and calculate, but could lead to major issues in the accounting process.

The Solution

So how can these challenges of manual processes be resolved? The obvious answer is to automate the process with invoice software.

With the ProSpend Invoice module, A/P departments can streamline the entire process

• electronically capturing the invoices as soon as they are received
• accurate and compliant budget allocation
• faster approval by the budget owner

In addition to speeding up the approval process, using invoice management software will also give full visibility into the process, as well as eliminate issues related to non-compliance by automating business rule enforcement.

Can your company afford to process invoices the old way?   Reach out to us today and we can show you how you can transform your processes and save money.