By James Gibbons, Head of Content Services, Kyocera Document Solutions UK
A few years ago, most organisations were unsure if automating business processes was really worth the time and investment. Fast forward to today and the reality is that automated processes and workflows have become an essential component in supporting operational efficiency and business growth. The benefits that accrue from a properly implemented process automation project range from faster delivery, more efficient use of resources, lower overall costs, improved cashflow and improved customers & supplier satisfaction levels.
Whilst there are many processes that might benefit from re-engineering and automation, few stand out as much as those in the Accounts Payable (AP) department. The nature of invoice processing and management lends itself perfectly to a more automated and systematic approach to manage the following segments:
Document recognition and intelligent extraction
Transformation of unstructured data to structured formats
The capture of data to one or more systems
The initiation of processes dependant on sets of business rules
Other subsequent financial processes
Re-engineer cumbersome procedures
Many organisations are still reliant on traditional invoice processing, which is often made up of manual processes that can be slow, unreliable, costly and prone human error.
Invoices must be received, datestamped and checked by accounts payable, recorded on financial software, approved by someone in authority, matched or cross-referenced, transferred to the payments system and then stored for future reference. Such a cumbersome procedure incurs high staff costs and has considerable potential for delays and errors. If (or when!) it goes wrong and invoices go unpaid, it can damage an organisation’s reputation and may result in late payment fees.
This process has become increasingly complex in recent years, as invoices are received through a multitude of different platforms, in both hard copy and electronic formats, via post, email, EDI and fax. The vast majority are ‘semi-structured’ and have to be entered manually. As noted earlier, such manual processes can be error prone and lead to issues such as invoice duplication, incorrect or repeated payments, paying the wrong sum and entering incorrect PO numbers.
When mistakes occur, it tends to be costly to put them right. Aberdeen Group, the market intelligence and analyst company, calculated that the most efficient companies spend an average of 2.8 days processing invoices at a cost of about £1.75 each, though the industry average is closer to £7.53.
The secret of the top performing companies? Automation.
The shift to the cloud
Many organisations are now migrating their financial management applications to cloud-based services at an increasing rate. In fact, a recent survey of senior finance executives found that 36 percent of organisations will use the cloud to support more than half of their transactional systems of record by 2020 (Gartner).
Automated, cloud-based invoice processing delivers many benefits:
1 Printing and postage costs are dramatically reduced, as is the time spent manually capturing and processing invoices.
2 Dramatic reductions in the need for on-premise hardware, software and all associated IT services, such as maintenance, configuration management, update management and deployment.
3 Allowing organisations to flex their demand and to access the scalability they need at any given time.
4 Costs and fees can be linked to usage and billing can be spread across the year on monthly cycles.
This scalability makes cloudbased invoicing appealing to many organisations, including SMEs on rapidgrowth trajectories.
Despite challenges, the switch to cloud-based invoice processing may not be as complicated as it might appear. Integration with other back-end systems can be relatively straightforward as the output from a cloud-based system can be generated to a wide variety of coding formats, be it XML, CSV, or customer-specific data formats. The analytical coding of invoices can be done directly by a cloud-based AP system and then passed to other back-end systems to automatically generate invoices.
Once a cloud-based AP system is deployed, there are immediate benefits for staff within the accounts department and across the whole business, as automated workflows will typically save staff time which can be allocated to other tasks. By designing in easy access, all staff can track the progress of an invoice and see its current status.
This transparency often mitigates or eliminates bottlenecks, resulting in fewer hold-ups than traditional invoicing methods.
Automation is the key to optimised invoice processing. Once they migrate old, manual processes, organisations adopting a cloud-based AP solutions service will see immediate benefits in terms of staff productivity, lower costs and a reduction in the number of invoicing errors.
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