It’s time for companies to rethink how they process their invoices. Manually processing invoices costs businesses a significant amount of money, not just in terms of the human hours dedicated to the task, but also in terms of missed early payment discounts, the accumulation of late payment fees, and the loss of supplier relationships.
In addition to the increased costs that come with manual invoice processing, it also wastes time, is tedious, and is prone to error. Despite this, many companies still process invoices manually, an act that puts them at a significant disadvantage in today’s competitive marketplace.
It doesn’t have to be this way. The challenges companies face when manually processing invoices can be overcome with the use of automation.
Invoice Processing Challenges
Institutional knowledge still remains one of the biggest hurdles to automation.
What is that? Institutional knowledge is mission-critical knowledge that lives inside the heads of the people that drive a specific process. In the case of invoicing, it’s the little details your AP teams are familiar with, things like vendor nuances, exceptions, and other rules.
Getting the knowledge transfer right when implementing an AI solution is critical, especially if this information isn’t widely known.
Another common challenge is the data and formatting problem. The invoice processing lifecycle consists of a number of key steps that take up an incredible amount of time when a human worker performs them manually. These steps include:
- Receiving, sorting, and authenticating the invoices
- Transcribing data into GL code to be entered into the ERP system
- Sending the invoice for approval
- Checking for errors and omissions
- Issuing payment
The format in which the invoice is received can further complicate the process. In 2019, an incredible 90% of invoices sent were paper invoices, despite the availability of today’s technological advancements. Even when invoices are sent digitally, they can come in a variety of different formats, such as:
- MS Word/Excel
For human workers to take the invoices that arrive, access the information in whatever format it arrives in, and transcribe it appropriately is a massive task. Fortunately, there is an alternative. Automation is the next stage in the evolution of invoice processing, and it comes with several significant advantages.
How Digital Workers Get the Job Done
It can be challenging for any business, large or small, to deal with the wide range of variables that come with manually processing invoices. Digital workers (software bots) can work alongside their human counterparts to automate the processing of invoices.
Digital workers can perform tasks such as pulling data from multiple systems and sources, auto-categorizing invoices, auto-filling forms, and verifying information. Yet, while they are performing all these tedious tasks, human workers are still involved in the process, validating the invoices to ensure quality assurance.
The Benefits of Using Digital Workers to Process Invoices
Digital workers are not meant to replace human workers. Instead, the use of digital workers frees up human workers to focus on tasks that carry a higher value, such as supplier relations and dealing with major invoicing issues that come up.
The benefits that come with processing invoices using digital workers are many. They include:
- Reducing the invoice processing time: Automating invoice processing makes it possible for a company to process 8x more invoices within a specific timeframe.
- Reducing the cost per invoice: Small companies reduce their cost per invoice by more than $3. This savings per invoice is nearly $2 for medium companies and close to 50 cents per invoice for large companies that process 100,00 or more invoices annually.
- Get early payment discounts and avoid late payment fees: According to the Institute of Finance and Management (IOFM), 80% of companies offer an early payment discount, but only 46% of companies benefit from just a fraction of the discounts offered. With the increased speed of invoice processing, companies can take greater advantage of the early payment discounts and avoid late payment fees.
- Elimination of errors: Digital workers can intake invoices, transcribe data, and fill out forms without the error that is inevitable when these tasks are done manually.
- Maintain good relationships with suppliers and vendors: Fast invoice processing and payment helps maintain your relationships with vendors and suppliers, which is critical for the survival of your business.
Seamless integration: Digital workers can seamlessly integrate with all your business systems, which will provide you with end-to-end automation.
Invoice Processing Use Cases
There are many ways in which the automation of invoice processing can improve overall AP functionality. The following use cases show the power of digital workers and what they can do for you.
Invoice matching and approval
When an invoice is received, it must be matched to a purchase order (PO) or be approved by the finance department. If matching to a PO, the correct PO must be located, and a tedious line-by-line search conducted to detect any errors or discrepancies. If approvals are required, this means manually following up with the finance department and juggling emails.
Digital workers can automatically locate the corresponding PO for each invoice and conduct a search for errors that takes mere seconds. Once the PO is verified, or if no PO is found, digital workers will automatically send the invoice to the appropriate person for approval, along with reminders of payment deadlines.
Once payment of an invoice has been authorized during manual invoice processing, the invoice is sent to human workers to initiate the payment through online banking. This requires workers to have access to information on relevant payment deadlines. This can be difficult to keep track of when processing dozens or hundreds of payments.
Digital workers can automatically prioritize payments to be made based on deadlines and schedule the payments to come out on the set date and via the preferred payment option for the particular vendor or supplier. This eliminates the risk of missing a payment and maximizes the organization’s use of early payment discounts.
Scaling a business
When manually processing invoices, as much as three to four of processing time for every single invoice that is added. This means that when a company is scaling their business and adding new vendors, suppliers and service providers, they will need to add significant overhead in order to handle the increase in invoices received.
The use of digital workers makes it easy to scale invoice processing as a company grows because invoice processing takes just a few hours, rather than days. Plus, since digital workers can batch-process invoices, adding more to the batch does not significantly impact processing time.
Get Automation Working for You with Ampliforce’s Digital Workers
With the global marketplace becoming more and more competitive and the need to cut costs growing exponentially, it’s time to automate your AP invoice processing.
Ampliforce has the years of experience to provide you with a complete end-to-end solution, without the need for third-party intervention.
Book a discovery call with Ampliforce’s automation team today and find out how easy it is to process invoices with digital workers.