Ten days. That’s the shocking length of time it takes companies in the US to process a single invoice, according to market researcher Ardent Partners. In their most recent report “The State of ePayables 2021” they lay out the simple reason why it’s taking accounts payable and accounting teams so long to pay vendors and suppliers: “The average AP operation is still handling too much paper and spending too much of their time focused on the simplest of tasks.” Shuffling lots of paper, in short, has serious downsides. The good news is that there is an alternative route. More and more organizations are switching from a manual, paper-based invoice workflow to automated invoice processing.
How To Speed Up the Invoice Approval Workflow
Automation is a surefire way to not just speed up the workflow process, but to do it right. It saves time and money, impacts cash flow, and captures early-pay discounts. For example, a secure cloud-based platform automates the complete process from purchase to payment, racking up 80% percent in cost savings and cutting processing times for an invoice down to days, sometimes only hours. Each stage of the workflow is customized to the specific needs of each organization with each approval step simplified and any issue needing further attention appropriately routed. Accounting teams - in fact, anybody in the organization - has immediate access to any needed information at any time, from anywhere.
As you can see humans still play a key role in the ensuring the integrity of the accounts payable function, but they no longer need to deal with repetitive, manual activities such as capturing, coding, routing, and paying invoices. Furthermore, because of the minimal human touch required in straight-through processing, an organization can be up and running in a matter of hours and earning a return on their AP automation investment almost instantly.
In fact, Ardent has done the math and reports that companies with end-to-end AP automation are able to process an invoice in just 3.3 days and at a cost of .25 compared to 0.95 for all other enterprises. The exception rate, an indication of how much additional work the AP team needs to put in when an invoice is flagged, goes down from one in four to only one in ten invoices.
Worth noting is that in the case of automated process workflow, speed doesn't mean oversight. The software automatically checks and rechecks data between documents, picking up on errors, reducing fraud, and facilitating audits at any point in the process.
So How Can You Supercharge Your Company System?
When Yooz commissioned its first global survey on the “State of Automation in Finance”, more than one-third of finance leaders said time-consuming processes were the biggest problem related to manual accounts payable tasks. Issues such as manual validation of invoices, reliance on paper documents that needed to be printed and shared across the business for authorization, result not only in delays but also a risk of errors and loss, especially in organizations with multiple sites. That means if you want to supercharge your company system, you'll have to eliminate the manual, time-consuming tasks. This can be done simply by embarking on the journey to digitally transform and, most importantly, automate the complete invoice approval workflow process from purchase to payment.
The formulas are straightforward: removing the bottleneck (the manual, time-consuming workflow activities) equals a simplified, streamlined process. A better process equals improved service and faster payment. Removing obstacles equals happier departments, vendors, organizations... Basically, everybody and everything.
The Five Steps to an Optimal Invoice Approval Process
On a superficial level a workflow moves through a few stages: procurement, approval, receive, pay. However, when you move from paper to technology there are some additional considerations. In a comprehensive automation system, there are essentially five steps to achieve an optimal invoice approval process. Each step is a smooth transition to the next and each step provides value towards supercharging the workflow:
Capture: Regardless of the invoice, whether it’s on paper, fax, an email attachment, a photo from a smartphone, an FTP upload or EDI submission, the software can ingest most invoice formats with almost no training. Yooz is smart enough to recognize all this information, such as a batch of invoices, and split them up correctly.
Extract: Optical Character Recognition combined with smart data extraction enables fast and accurate extraction of all relevant data and correct GL-coding, automatically matching an incoming invoice to a purchase order. The risk of costly typos or erroneously paying an invoice twice goes down dramatically, while the cycle time drops.
Approve: Forget about sending invoices around departments or mailing them to the designated approver. An automated process will automatically route invoices to the right recipient for them to approve or further review if it detects an exception. Since it’s cloud-based, managers can approve an invoice from anywhere, anytime, including on their mobile device. If several parties are required to give their approval, the system automatically sends an invoice to the right recipients in the right order. Interruptions such as work-from-home mandates no longer create a backlog of invoices or risk drying up your cash flow. With Yooz, intelligent automation ensures businesses keep going in times of crisis and keep growing when things calm down again.
Pay: An invoice approval workflow that’s worthy of its name must cover the entire lifecycle, from purchase to payment. Yooz also automates the payment part with its payment partners and the new YoozPay module. In one web interface, the AP team only chooses the amount and a manual or automated payment schedule. Vendors can be onboarded with just an email address and one click to select their payment method. If they want to be paid by virtual credit card, electronic payment arrives instantly in their account.
Export: When payment has gone out a comprehensive system automatically exports the data to more than 250 of the most popular finance software and ERP systems to mark an invoice as paid and reconciled with the PO.
Automated Invoice Approval: The Future of Work (-flow)
Automation is the one best way to lend superpowers to your company’s invoice approval workflow and save significant amounts of time and money. But there’s more. With all the data contained in every single invoice recorded and easily accessible from anywhere, the entire company benefits from a stream of real-time financial intelligence. Departments can then use those insights to build a better relationship with suppliers, negotiate more favorable terms, and even - hopefully - experience increased job satisfaction.
Automation turns what used to be a time-consuming and complex process into a breeze. Once your hands and heads are freed from hunting down invoices, chasing colleagues for a signature or stamp, cutting checks, and archiving documents, you’re catching a glimpse of the future of work.