Drowning in invoices - AP Departments unable to cope
If you are a large business processing thousands of invoices a month, you may be used to backlogs in Accounts Payable causing delays.
If you're small business you personally may have spent many late evenings manually entering dozens of invoices, worrying about your accuracy and how you will cope with business growth. Its a growing issue among many companies, how to manage the ever increasing mountain of paper...
The AP Automation Study by The Institute of Financial Operations (IFO) (www.financialops.org) confirmed that AP operations are dealing with much higher numbers of invoices. This signals improvements in revenue which is great news for businesses and a recovering economy.
But it isn’t all good news.
AP departments are impacted by slow, manual paper-based processing. Businesses invest in technological advances but the AP department has often been overlooked. As a result AP departments are drowning in invoices, struggling to manage invoice volumes but are often restricted by manual processing methods that are time consuming, error-prone and incur a high cost per invoice to process.
The IFO report did state there had been some technological advancements in AP. The use of OCR in AP departments for example is up from 23% to 38%. So that’s good news isn’t it?
Well. Not necessarily.
Sure, OCR is often better than complete manual processing. But OCR starts with a paper invoice which needs to be scanned. The OCR engines then try to make sense of the black and white pixels on the scanned image and convert each group into a character. The whole process is subject to errors and therefore time must be taken to check and manage corrections. As invoice volumes increase so does the pressure on staff to deal with the checking and correcting which is necessary to ensure quality control with OCR technology.
What AP departments really need is something that can deliver fully validated and compliant electronic invoices straight into the finance application, without the need for any paper handling or OCR correction and clean up activity…..and preferably with a solution that guarantees high supplier adoption.
So... how can this be achieved?
There are a variety of methods which can be used to meet these demands, though we would recommend suppliers simply send PDF invoices via email. It's particularly effective as the transition time is simple and quick for the supplier - and PDF invoicing is already the second most popular way to invoice after paper.
E-invoicing in this form only requires the supplier to email the document to a service provider such as CloudTrade, after which the relevant data is mapped and repopulated directly into the receivers accounting system. No need to review and correct OCR results, no need for manual data entry. As the data mapped from the PDF is the data that was originally placed there by the suppliers billing system, data quality is guaranteed.
Most AP departments are crying out for a release from the grind of manual invoice processing. Suppliers that move away from paper and onto electronic invoicing, help remove the burden posed by rising invoice volume.
Discover PDF Invoicing by reading our guide: