Ten to twelve days. That’s how long it takes a company in the US to process a single invoice. It’s a statistic that highlights the enormous amounts of time and money involved in performing a basic yet vital back-office task.
Organizations on average spend 32 hours each month handling vendor invoices, and when we polled more than 1,000 financial and accounting decision makers, almost half told us the pandemic has made matters worse because it had a “significant to extreme impact” on their ability to process invoices on time.
Unless, that is, they embraced invoice payment automation. Using a cloud-based platform lets companies of any size and in any industry streamline their entire invoice-to-pay process with maximum efficiency gains but as little human intervention as possible. As market researcher Ardent Partners found in its most recent report “The State of ePayables 2021”, getting the invoice-to-pay workflow right is crucial for the entire purchase-to-pay cycle. Not only does it compress cycle time down from 10 or more to just 3.3 days, it also has tangible benefits for the entire business. It “...allows Best-in-Class AP groups to take advantage of more early payment discounts [and] frees staff to assist or support in more strategic financial activity. Automated invoice processing speed remains a core KPI from which to gauge the effectiveness of vital AP competencies.”
Automation Makes Invoice Payment Easy, Fast, and Secure
Those advantages add up quickly and affect the bottom-line in multiple ways. That’s why a growing number of companies are jumpstarting initiatives to make their invoice to pay process digital and automated. As we report in our first “State of Automation in Finance” report, almost one in five organizations have adopted fully automated invoice processing. How invoices are captured, read, and routed until payment can be initiated isn’t rocket science. Thanks to the use of Artificial Intelligence (AI) and Machine Learning (ML) capabilities, today's cloud-based software platforms are able to rapidly and securely usher an invoice through your organization until the supplier sees the payment show up in their account.
The process starts with lightning-fast and reliable capture. No matter in what format invoices comes in - physical mail, via fax, as an email attachment, or as an electronic submission through a self-service supplier portal - modern AP automation software can ingest the document and read it. All crucial data points, from invoice and PO numbers to amounts, due dates and bank account and tax information are captured by the platform.
Machine Learning Powers the Future of Invoice Payment
The second marker on the sprint from invoice-to-pay is the automated review process. A combination of robotic process automation (RPA) augmented by an additional layer of powerful machine-learning algorithms understands what’s in each invoice. The platform will automatically GL-code the invoice, match it to an existing PO, and flag irregularities that would otherwise slip through and resulting in errors or cause time-consuming reviews.
Cloud-based platforms are easily updated, ensuring that organizations are always benefitting from the latest technologies. In other words, this means that you’re constantly working with state-of-the-art tools for smart purchase-to-pay automation. As a result, straight-through processing dramatically reduces the amount of time and money Accounts Payable (AP) staff has to spend on menial, repetitive tasks such as shuffling paper, sorting faxes, entering amounts, or even just maintaining files.
Instead, they have their hands and heads free to add real human value to the workflow, such as digging deeper into invoices that are flagged as exceptions and investing precious time into improving buyer and vendor relationships. A quarter of AP staff’s time, after all, is wasted on fielding client and customer requests and chasing down invoices.
Invoices Handled Right, From Purchase to Payment
Thanks to today's ease of implementation, your staff doesn't need to be wasting their time. Instead, you can be up and running within the same day. For example, Yooz is up and running in under an hour and able to correctly read north of 80% of all incoming invoices right from the start without any prior configuration. As the platform sees more vendor invoices, it quickly expands its knowledge and understanding of even the most unusual invoice formats.
Onward to marker three, the approval of an invoice. The workflow is customizable, allowing the organization to easily tweak the set terms to approve or reject an invoice. If the same-day payment of invoices is your goal, AP automation has you covered. The software will transfer each invoice to the right people in the right order for approval and frees management from being chained to their desk to do so. A mobile interface works on smartphones and tablets, so invoices can be viewed and approved from anywhere, anytime.
Approve Invoices From Anywhere, Initiate Payments Automatically
Speeding up the process was never more important than during and after the pandemic, where months of work-from home policies led to thinned-out staff in the office and major backlogs. Companies that didn’t already have or rapidly implement digital automation were struggling with piles of unopened mail and invoices, a slew of emails asking about outstanding payments, and having to deal with serious cash-flow troubles if they were acting as suppliers themselves.
An automated invoice payment process eliminates all of these roadblocks, as mentioned above reducing processing time. That means what used to often take weeks and months now moved to hours and days (if not faster). Thanks to mobile access, there is no delay in approving. In fact, organizations can set parameters by which certain levels of payments are automatically approved. Meanwhile, management can rest easy knowing that if the invoice made it to that point all the information was already verified and digitally tracked throughout every step of the process.
This leads us almost to the finish line, initiating payment of an invoice. Advanced AP automation extends throughout the entire process, meaning that organizations can pay vendors right from the same intuitive invoice. In the Yooz system, suppliers can be onboarded with a single email address and have to make a one-click selection of their preferred payment method (virtual card, ACH, eCheck or traditional paper check if they want to).
The payment automation software handles the rest automatically, so AP staff only have to pick the invoice amount, payment schedule (manual or automatic) and whether they want individual or batch payments. Even better, with the new YoozPay module, vendors can be paid by virtual credit card. This brings the convenience of end-to-end automation that we’re accustomed to from our consumer transactions to the business payments world.
Not only does payment by virtual card provide vendors with their funds instantly. It also adds another layer of detail for enhanced security by way of multiple checks and it creates an improved audit trail through more granular transactions. Last but not least, the elimination of late payments and associated fines, the possibility of early payment rewards, and payment by virtual credit card generating cash back for your organization with every invoice paid all mean that the payment process can actually turn into a revenue stream. Who would have imagined?
Reduce Processing Costs
If paying an invoice on time to capture all discounts and avoid late fees is the finish line, it certainly doesn't hurt to benefit from around an 80% drop in processing costs per invoice from $10.95 to just $2.25.This amount, discovered when Ardent Partners reviewed best-in-class AP departments leveraging the power of the Yooz platform, can add up to several thousand dollars a year even for small companies processing only a few hundred invoices per month. Imagine the cost savings when that number jumps to thousands or even more. It’s one way to turn a traditional cost center into a tangible value driver for the entire organization.
There’s a bonus as well. Modern AP automation platforms often can automatically connect with the financial software or ERP system of choice, reconciling the just-paid invoice with the matching PO and update its payments status. Yooz currently has this plug-and-play functionality with more than 250 of the most popular ERP packages, and new connectors are added weekly. It’s high time to say good-bye to managing the invoice-to-pay process in a spreadsheet. Automation means switching from costly typos to competitive tempo.
Invoice Payment Comes with a Bonus: Financial Intelligence
We’ve slashed processing costs, compressed cycle time, knocked out errors, exceptions and fraud. But here’s the real trophy waiting at the end of this victory lap: gaining real-time, actionable insights from things you have to do anyway, paying invoices. Since all documents are securely stored in the cloud, you gain instant visibility and will no longer lose documents. Not to mention searching through endless boxes of stored invoices, let alone finding the right boxes to search..
Everything you want to know is just a quick search across all invoices away, either by simple keyword or by defining multiple search criteria. Documents can be classified in dynamic folders and assembled with a “digital staple” any way an organization wants to optimize them.
What you get in return is financial intelligence, powered and constantly enhanced one invoice and one payment at a time. It lets any business monitor its financial health, optimize its cash flow - and stay on their vendors’ best side. It literally pays off to never pay late and keep communications open through a self-service vendor portal. A live reporting dashboard gives you the power to negotiate discounts and make sure your supply chain will run as smoothly as possible.
The race to automate invoice processing is on, and Yooz gives you the engine to do it with unmatched speed and security. Are you ready to floor the pedal and take that victory lap?