Mitigate increasing operational costs with digital invoice processing

With external factors squeezing the bottom line, key business decision makers are met with the challenge of improving business processes, whilst simultaneously reducing costs.

In this blog, we explain why businesses need to switch from manual to digital invoice processing to be able to mitigate rising operational costs.

Since 2020, the success of an organisation navigating the mounting crises can arguably be attributed to their agility and innovation. In many cases, undertaking digital transformation projects have been essential.

In recent years, it seems as though every time the economy has relatively stabilised after one crisis, another appears. Businesses have had to respond quickly, adjusting their strategies in order to survive during this period of significant and rapid economic change.

For example, the COVID-19 pandemic has been a key driver of change, especially in terms of online retail. Businesses that recognised the potential of eCommerce during this time were the ones that mitigated significant losses from high-street sales. Our report, Agile Business in a Time of Rapid Change, highlights the importance of innovative responses to unforeseen economic events.

We can even identify some of the ‘winners and losers’ in their strategic responses to the pandemic, such as John Lewis and Primark:

Evidently, businesses cannot wait idly until “normality” returns. Currently, widespread price inflation is continuing to up the stakes. Key decision makers need to be innovative in their response. The question is how to offset increasing operational costs whilst retaining profitability and maintaining market share?

For a lot of organisations, key decision makers across the business have different focus points and maybe even conflicting objectives.

Business directors and CEOs want to ensure growth and reduce unnecessary blockages/overheads, commercial managers want to create greater efficiencies, and digital transformation teams want to see just that – the digital transformation of business processes.

Whilst each of these individuals and departments may be working towards focused goals, all of them could be met by embarking on a manageable digital transformation project. Switching to digital invoice processing offers just that.

By adopting a digital approach to invoicing, the pain points discussed above are addressed:

Digital invoice processing can reduce operational costs by an average 60-80% through the power of automation.

Look at the AP (Accounts Payable) function for example. This business area typically processes a large number of incoming invoices from various suppliers. These invoices can also be in varying formats if an eInvoice mandate is not in place across the trading network. As such, incoming invoices can be email attachments, PDFs, scanned documents etc. With this in mind, the manual processing of these documents can be arduous, especially when the department is receiving thousands of them per month.

Automation solutions, such as those from Transalis, improve both the efficiency and associated overhead costs in this area. All incoming invoices are instantly translated into a standardised digital format which can then be integrated to the relevant business system for approval and payment. See fig.1 below:

In this visual representation of Transalis AP Automation, incoming invoices of all formats are passed through the ‘digital transformation layer’ where they are converted into a standardised digital format compatible for integration with the internal AP system. In some cases, there are document rejections where review and correction is needed, however this process is entirely managed by the Transalis team.

AP Automation removes a significant amount of manual work. New overheads do not need to be introduced to manage the growing workload as the business scales. What’s more is that by implementing an automated solution, businesses can benefit from early payment discounts. Many suppliers offer discounts if the invoice is paid within 15 days, for example.

Therefore, focusing on a particular area of digital transformation, such as invoice processing, rather than a widespread project means that ROI could even be seen in the same financial period.