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The Accounts Payable (AP) function of any business has a lot of paperwork to process. Optimising AP invoicing seems like the natural next step to optimising processes and achieving greater business efficiency.
Within AP invoicing, a number of documents need reconciliation and sign-off. This can be a time-consuming and error-prone area of the business, particularly when all of this is processed manually.
In this blog, we explain that by optimising AP invoicing processes, businesses can achieve greater efficiency and significantly save on costs.
AP Automation
Achieve greater business efficiency and save on overhead costs with a solution that converts all incoming invoices and integrates into your chosen system
The role of AP invoicing
Accounts Payable, or AP, is the department that is responsible for processing and payment of incoming invoices. Within an organisation, AP invoicing follows a cycle of reconciliation, sign-off, and payment. For example:
AP receives the incoming invoices from their supplier
The invoice is then matched to the existing PO (Purchase Order) on file
Confirmation is then needed that products/services were received as invoiced
If all this lines up then the invoice is signed-off for payment
Whilst most AP departments use business and finance software to manage all of this processing digitally, there is still a substantial amount of manual data entry. This can be from rekeying invoice data from email attachments, scanning in paper invoices, and downloading data from other systems.
This processing is further complicated if there are any discrepancies within the data. For example, the invoice doesn’t match the PO, or the product/service was not fully delivered. In these circumstances, the AP team liaises with the supplier and ensures any further documentation is processed, such as credit notes.
There can be significant overheads to cope with the volume of incoming documents. This is not an efficient way for businesses to manage AP invoicing. Manual processing is also time-consuming and error-prone. This makes the overall AP function a significant cost centre in any business.
AP process optimisation
An organisation’s inability to onboard their supply network to a cohesive, standardised and digital system is one of the reasons manual AP processing remains in place.
Whilst, in theory, having a one-size-fits-all solution for everyone involved would be much more efficient, it could be complicated to implement.
This would require the whole network to follow consistent document formatting and access the same software for digital exchange. Practically, this is not always possible. Depending on the size of the contract, it may not be financially viable for a supplier to bear the cost of implementing software to fulfil their client’s requirements. However, there is another way to approach this challenge.
Organisations can instead opt for a solution that offers digital document standardisation (also known as paper-to-digital), such as Transalis AP Automation. The main benefit of this type of solution is that it doesn’t rely on the compliance and onboarding of suppliers.
This is how it works:
All incoming invoices are diverted to the Transalis Cloud for digital document standardisation
eInvoice Automation converts all of these different file types (PDFs, scans, email attachments) into the preferred digital file format
These converted files are then transferred to the chosen business application for further processing by the AP team
With AP Automation, there is no need to onboard suppliers and no need to rekey data. This significantly reduces the AP invoicing processing time and error rate.
In fact, businesses can save an average 60-80% on processing costs by implementing a digital AP solution. See how much your business could save by using our AP Automation ROI calculator.
eInvoice Software
AR Automation
Scalable digital compliance for outbound invoice processes. Build the ideal solution for your AR team.
AP Automation
Convert & integrate inbound files with 60-80% ROI. Ideal for AP teams manually processing 2,000+ invoices per month.
Want to know more about how harnessing automation could make AP invoicing more efficient for your business? Contact us on 0845 123 3746 (calling from the UK) or +44 1978 369 343 (for international callers), or contact us via email sales@transalis.com