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8 mins read

Accounting and Technology

Invoice Management Software as a Transformation Solution

by Yooz on 09.20.2022

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Ask businesses about their IT outlook and you will get a decidedly cloudy answer. Driven by the sudden rush into remote and hybrid work environments after the pandemic hit and pushed into more online project collaboration, businesses are looking to modernize operations by way of digitization and automation. Specifically, organizations are betting on a cloud-based future.


When market researchers from the B2B technology company Spiceworks Ziff Davis (SWZD) polled cloud decision makers in 2021, they found that by 2022 50% of all business workloads are expected to run in the cloud. In fact, almost half said their company already follows a “cloud-first” technology strategy. That same determination to innovate also shows up in business expenditures. Gartner reports that companies world-wide are expected to spend nearly $500 billion this year on cloud computing, up a solid 20% from 2021, driven to a large extent by investments in Artificial Intelligence (AI) tools.


The wish to harness powerful software running in the cloud to empower teams, no matter where and on what devices they work, is a perfect example of how accounting and technology go hand in glove. Intelligent platforms that handle the accounts payable process from purchase to payment help boost efficiency as well as attract top talent and help companies stay competitive for the long term.

 

Getting up to Speed with Automation for Invoice Management

 

Automation is certainly the biggest trend in the finance function. Getting rid of as many manual processes as possible in the invoice workflow unlocks a whole range of benefits, starting with fewer hours spent on handling paper-based invoices all the way through to expediting payment. Automating your invoice management process using the right software also reduces the number of data entry mistakes and errors, resulting in fewer exceptions that in turn require labor-intensive corrections. What’s more, automation streamlines the workflow around reviews and approvals all the way through to initiating payments.


When Yooz polled 1,200 finance and accounting leaders for the second State of Automation in Finance report earlier this year, 54% of US businesses said that automation has helped them remove most manual processes, while another 19% stated that it let them get rid of at least half. Even if many organizations might still be far away from completing a full digital transformation, the shift toward automating the finance and accounting functions is happening before our eyes, and it’s gathering speed. This is borne out by the fact that 61% of businesses in the US say they are “ready” or “almost ready” for e-invoicing.

 

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Untethered but Connected: Mobile Work Calls for Invoice Management Software

 

The second big trend in invoice management software - mobility - amplifies this development. People are no longer tied to their desks and instead have come to expect the flexibility, convenience, and intuitive ease of use offered by mobile devices and apps. Why be stuck in a back office slicing open envelopes, sorting faxes, and keying data into a spreadsheet when you could just have the same information automatically appear on your smartphone or tablet.


You could be on the road, with a client, or working from home but you should still have the tools to get your work done, whether it’s creating and sending an invoice or reviewing and approving an invoice from a vendor for payment.


The shift to mobile invoicing is particularly important in the case of emerging economies where many businesses and consumers have leapfrogged the desktop era entirely and gone straight into a mobile-only world. In some cases, government legislators even prefer electronic transactions and would like to do away with paper invoices, cash, and checks altogether. State-of-the-art software must be ready for this changing world and needs to ace all tasks around invoice management from inventory tracking and managing goods through product or service billing and invoice payment, regardless of what device or form of payment an end-user prefers.

 

All-in-One Gets it Done: Why You Need an End-to-End Platform

 

Is it enough to automate a part of the process? Certainly this is a better option than no automation at all. However, an end-to-end system outperforms a manual or semi-automated workflow in every aspect, allowing you to truly experience the benefits of invoice management software. And, in this new world, the capabilities to handle invoices and payments in a scalable, secure, fast and cost-efficient way reside in the cloud. A cloud-based platform features capabilities such as easy mobile access (from anywhere at any time), low-cost maintenance (which often transfers to customers in the form of easily scalable, affordable monthly plans), plus secure and scalable storage. Most important, using a cloud-based platform levels the playing field for businesses of all sizes who now have access to the same technology and capabilities.


Cloud-based invoicing software purpose-built for AP automation packs all the front-end capabilities required to automatically capture invoices, extract relevant information without human handholding, review and route documents to the right people, and send out payments. And, as mentioned above, it is easily able to deliver these capabilities to where and when an AP professional needs them.


On the backend, end-to-end invoice management software does much more than just save time and money. Invoice by invoice, it creates a live archive that the team can query for all kinds of financial questions all while building a digital audit trail. Whether it’s about reviewing a specific PO, drilling into the lifetime relationship with a key supplier, or building a report for the CFO, invoice management software is the key to real-time financial intelligence.


And it integrates with a company’s existing ERP or accounting software to reconcile invoices and payments with the information housed in those databases. No more silos, but a seamless flow of information that everyone can tap into, according to their roles and permissions.

 

Machine Learning Gives Invoice Management Superpowers

 

Last but not least, finance professionals are betting on the continuing rise of cloud-based AI tools that empower their AP teams to process more invoices more accurately faster, and at much lower cost. In fact, artificial intelligence has proven to process an invoice with 80% cost savings and significantly faster - measured in hours or minutes - without any compromises when it comes to fraud and duplicate detection. Three-way matching, for example, uses a combination or robotic process automation for simpler tasks around invoice handling and machine-learning algorithms for more complex operations such as reading, understanding, and verifying each document's details. It will reliably detect anomalies and missing data even when an organization handles thousands of invoices. Software is simply better at quick pattern recognition and sifting out outliers that deserve closer inspection.

 

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Lofty Goal, Accomplished: “We want a machine that can learn from experience”

 

Nobody stated the goal of putting AI to work better than English computer scientist Alan Turing:


“What we want is a machine that can learn from experience.” Cloud-based invoice management software does exactly that, one invoice at a time.


All far-reaching change comes with doubts, worries and pushback. The AP team might fear they’ll be replaced by bots that are faster and smarter. And it’s worth taking those concerns seriously. Adopting the use of invoice management software does not change the fundamentals of the process itself.


Instead, digitization and automation add significant value along the entire workflow. Stacking expense reports and sorting faxes are not high on anyone’s list of daily tasks. Hunting for the reasons for an invoice exception or reviewing a suspicious document after machine learning algorithms have detected inconsistencies are much more exciting and rewarding. In that sense, invoice management software not only saves your business time and money and makes it more resilient.

 

Why Invoice Management Software Gives Us Back Time to Do Meaningful Work

 

Invoice management software also boosts job satisfaction and morale, which help retain the people you have and attract the bright minds you want. They will be drawn by a powerful technology platform that augments their professional curiosity with analytical superpowers. Invoice management software sets your team on the course to better manage cash flow and generate returns from working capital, all while never paying an invoice late again.


AI expert Kai-Fu Lee who did pioneering work for Google and other names in big tech describes the overarching promise this way in his book AI 2041:


“AI will create efficient services that will give us back our most valuable resource - time. It will take over routine tasks and liberate us to do more stimulating or challenging jobs.”


Contrast this vision with a person on the AP team who is currently printing and mailing checks by the dozens or hundreds every week. Apart from the fact that it costs between and to handle a single check, not counting time and money spent on the receiver’s side, cutting checks and posting them is menial labor that automation can handle better and faster.


A purchase-to-pay platform will change the way your team experiences its workday. It’s suddenly easy to invite a supplier to become part of a live business network built around visibility and transparency. Vendors can be onboarded with just an email address and are free to pick their preferred payment method.

 

Secure and Timely Payments: Another Benefit of Invoice Management Software

 

The final step of the payment process is handled in the same intuitive interface as the preceding parts of the workflow. Staff select the invoices to pay, choose the full or partial amount and finally create a manual or automated payment schedule.


Again, convenience is king because for regularly recurring invoices from vetted vendors, invoice management software has the capability to review, approve, and initiate recurring payments, either for single invoices or batches of invoices. No time-consuming handholding required. At the same time, automation boosts payment security since the system will routinely perform final checks for key metrics such as payment volume and velocity before funds go out. It’s one more reason why fewer errors, duplicate payments or fraud attempts will slip through.


Lastly, late payments due to backups in processing invoices and their payments can have a material impact on the relationship with important vendors. A speedier process means paying invoices on time, every time. This improves the relationship between any two entities, building goodwill that you can bank on later.

 

Cash-Back and Happy Teams: There’s No Reason Not to Automate Your Invoice Management

 

Once late payments (and any associated penalties) have been eliminated, easy payments become an option. In fact, businesses can even unlock a new revenue stream if their vendors choose to get paid by virtual card. Those single-use electronic cards do more than just offer a cheaper and faster way to settle an invoice, beating paper checks, eChecks, and ACH transactions. They also generate cash-back for each invoice and turn a cost center into a new revenue contributor.


Fewer repetitive tasks, fewer errors, less fraud, significant cost savings, higher job satisfaction, and giving everyone a shot at making a meaningful contribution to the bottom line one invoice at a time. Those are powerful and convincing reasons why invoice management software should be part of every company’s map for the future. It’s a journey worth taking.

 

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