You’ve surely heard about the sales funnel, but did you know that accounting is also funnel? Everyday dozens or hundreds of invoices and other documents arrive on paper, via email, or in electronic format and need to be captured before they can be processed, paid, and filed. However, that funnel can quickly become clogged if a company is still heavily dependent on paper invoices which in many cases require manual handling.
Modernizing the workflow and making it run smoothly with the help of digital transformation helps any company unlock a host of benefits. Fewer errors, fewer exceptions, shorter cycle times, and drastically reduced costs - not to mention improved customer service - are just a few of the advantages to be gained with a digital invoice process.
Now more than ever before businesses are realizing that they are leaving money on the table by sticking to paper invoices and are increasingly embracing an end-to-end digital workflow from purchase to payment.
It’s a Movement: From Digital to Electronic Invoices
As market researcher Ardent Partners found in its latest “The State of ePayables 2021” report: “With nearly 60% of businesses using e-invoicing solutions, a solid majority of businesses have finally realized the value of having a digitized means of billing from suppliers and vendors. The increased e-invoicing adoption levels are a leading indicator of a huge increase in the percentage of electronic invoices sent.”
What’s more, many countries - with the notable exception of the US - have already put regulations for e-invoicing in place. While the governments provide support (especially for smaller businesses), the movement is still forcing companies to change their practices. Fortunately, many of the companies quickly experience the benefits of a smart system that automates invoice processing.
Why wait for a mandate, though? It quite literally pays to take the lead in this movement to upgrade your accounting function, both in terms of what a business spends and what it saves. While it may be way off until all invoices are submitted in a structured electronic format that’s machine-readable, businesses of all sizes can start with digitalization right here, right now.
How AP Automation Bridges the Digital Invoice Gap
So going digital will solve all my problems? Not necessarily. For starters, there’s a difference between a digital and an electronic invoice. Any document that’s born on paper can be digitized and a Word document or PDF is digital. But that doesn’t make it an electronic invoice, not yet. The latter format requires structured data that machines or software can read. This is where automation comes into play.
Accounts Payable (AP) automation in the cloud makes it easy for any business to bridge the gap between digital and electronic invoices. Even if most of your invoices and other documents are still on paper, automation is a way to ingest all of them for speedy and secure processing at a fraction of the current cost.
Yooz, for instance, will capture any type of invoice so they can be converted into digital copies for review, approval, and payment. Multi-channel document import works well for multiple formats, as the name implies. Regardless of whether an invoice arrives in an envelope, as a fax, as a PDF attachment, or in one of several electronic formats such as EDI, the software will automatically capture the document and prep it so machine-learning algorithms can extract all relevant information and send it through the invoice process.
From Purchase to Payment: How Digital Invoices Close the Loop
Less or no human touch at the wide opening of the funnel means fewer mistakes or errors, and cost-effective processing at scale, from purchase requests and purchase orders to credit notes, goods receipts and more.
The way your organization can capture documents today should also be as flexible as needed - whether you drag and drop an attachment, snap a photo of an invoice on the road, or scan a stack of paper invoices. Smart technologies such as YoozStamp and YoozSmartSplit ensure that invoices are separated automatically and will enter the workflow without delay or, if necessary, alert management (or other designated person) when further review is needed.
Digital prep work pays off in each of the steps that follow. Software extracts the key data points from each document, automatically GL-codes the invoice and matches it to a PO, checks for inconsistencies or errors, and routes it for approval. AP staff can review and approve invoices from anywhere at any time, including on their mobile devices.
Ease of Use and Sizable Savings: How Digital Invoices Pay for Themselves
The same ease of use applies to initiating payments. When clients or vendors are onboarded with a single email address, all the AP team must decide is whether to make a full or partial payment and then to schedule the transfer. The automation software will handle the rest, performing more checks along the way and executing instant payment if all details are correct. As a final step, that digital invoice will be exported to the organization’s ERP or financial software package.
A streamlined workflow results in invoices being paid on time, which is key to lock in early-pay discounts and build stable relationships with key suppliers. It doesn’t get any easier than this.