Not too long ago, airplanes were routinely carrying bags and bags of paper checks around the country that not only had to be delivered and signed, but then also forwarded to the issuing banks and processed. Luckily, this is no longer the norm thanks to a growing number of consumers and companies using paperless payments, meaning that the entire process from purchase to payment involves little to no paper changing hands, whether it's an order or a check being cut and mailed.
Convenience aside, the use of automated invoice processing offers many financial and even strategic advantages for an organization. This is particularly true for multi-location businesses such as automotive, where individual general managers want to focus on strategic priorities to drive profitability at their dealerships rather than deal with heaps of purchase orders, expenses reports and invoices.
Yooz, the leader in cloud-based accounts payable automation, has been innovating this paperless AP process for decades. After having processed more than 100 million invoices for our clients around the world, we can say with confidence that a completely paperless invoice approval system is possible and achievable for everyone. Digital transformation is easier than ever before and can quickly save precious time and money to boost efficiency, productivity and job satisfaction at any dealership.
5 steps of a paperless accounts payable process
Let’s look at the five steps of paperless invoice approval that make a notable difference:
Step 1: The automation experience begins with invoice capture after a purchase. On the Yooz platform, powerful Optical Character Recognition (OCR) engine is the first step to transform a static image of an invoice into actionable data that will enhance your Enterprise Resource Planning (ERP) system or Dealer Management System (DMS). Documents arrive in a variety of formats, whether by good old paper mail, fax, electronically, or even submitted through a modern self-service vendor portal or website. Beyond OCR, Yooz employs Artificial Intelligence (AI) and machine learning algorithms that can read, understand, and index every word, date, and amount on a page.
Step 2: Next are three crucial steps in a touchless workflow that will require little to no human intervention. Every invoice undergoes verification, meaning it is automatically GL coded and matched with a PO to weed out erroneous submissions, duplicates, and help prevent outright fraud. What’s flagged as an exception will undergo human checks.
Step 3: Once verification is complete the system routes the document for approval to the designated recipient or even multiple recipients, depending on how the workflow has been customized. With Yooz there is no delay; team members or managers can view and approve an invoice remotely from a mobile device, anywhere and anytime. This means that even unexpected disruptions like a lockdown won’t affect your business.
Step 4: The next step is releasing the payment. Since Yooz connects to the payment gateway of your choice, you can do anything from initiating an instant payment to issuing an electronic check. Again, paying an invoice is based on the specific parameters that a company has pre-defined, depending on details such as invoice amount or type.
Step 5: Finally, a paperless invoice process shines through the automatic export function. A state-of-the-art platform will push all invoice data, plus the record of its accompanying path through the designated workflows to financial software such as an ERP or DMS. Yooz integrates with more than 250 of the most popular systems, partnering with several including Sage Intacct, CDK Global, Dealertrack, Netsuite, and Karmak to create a seamless user experience.
It's worth mentioning that invoices are tracked through every step of the process and stored in the cloud for easy access. No more searching and gathering documents to answer questions or support strategic decisions.
6 pain points of NOT having an automated invoice process
As evident in the five steps above, having a paperless invoice approval system solves tangible pain points in the accounting process that frustrate customers across multiple industries. There are simply too many things that can go wrong when handling paper documents.
For example, consider the following factors:
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Transport. Physical copies of the documents need to be collected, routed, shipped, and stored. Imagine the end of the month in particular, when carrier bags of invoices and expense reports arrive and need to be quickly processed.
- Fatigue Routine, repetitive tasks wear down the human system and result in a variety of different errors. Perhaps a paper literally falls through a crack or is misplaced in the wrong pile. Coding errors from manually keyed invoices go up the more documents come in. Even with a few hundred invoices per week, the risks of getting amounts or other details wrong multiply exponentially (and provide an opportunity for fraud as details often conflict or are mistakenly overlooked).
- Timing. Handling paper means invoices can all too easily go missing, leading to late payments and affecting supplier relations. Late fees are simply lost opportunities to save money and grow the business. Early payment, however, is an opportunity to gain additional revenue.
- Storage. Archiving all that paperwork in several places or at one central location is an expensive and expansive undertaking with its own risks.
- Digging. Experts have calculated that AP teams spend up to one-third of their time hunting down invoices for a status update or responding to supplier and vendor queries.
- Wondering. Paper leads to delays and lack of information which impacts day-to-day operations. A paperless invoice approval system, on the other hand, automatically keeps track of cash flow. It delivers financial intelligence to everyone in the company.
Of course, increasing costs are an obvious factor that results from a combination of all of the above. From paper supplies to postage, hiring additional data entry personnel to physical storage, operating costs keep increasing.
10 ways automation helps you master invoice processing
If the above points sound painfully familiar, let's imagine what happens when a business switches to automated invoice processing. After all, it’s an update that can be pulled off in little time but immediately translates into sizable cost and time savings in a short period of time.
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A powerful recognition and extraction engine can read and understand most invoices out of the box. What’s more, thanks to artificial intelligence the system becomes smarter with every invoice it sees.
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Customizable workflows that fit individual company needs cut processing costs and cycle times by 80 percent. The same cycle that previously to weeks can now be done in days, sometimes hours. Instead of promoting fear, the accounting process is simple and easy.
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The number of errors drop significantly, with fraud attempts and accidental (or on purpose) double payments a thing of the past thanks to more control and visibility on each transaction.
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Instead of late fees, early payment discounts are suddenly within reach and achievable. What used to be a cost center will become a positive contributor to the bottom line.
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Finding an invoice is as easy as typing a search query into a browser window. Locating an invoice by keyword makes audits a snap.
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Strategic decisions across the company are empowered by real-time, easily accessed financial information. Cash management takes on a whole new meaning.
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Relationships with vendors and suppliers are strengthened because they have more visibility into the purchase-to-payment pipeline.
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Accounts Payable staff is freed from ongoing repetitive tasks which are now handled by smart automation. In place of work fatigue, employees can focus on value-added tasks and also become more receptive to digitalization.
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A cloud-based platform offers a secure and encrypted digital filing cabinet that never runs out of space and provides a reliable audit trail.
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Growth. A cloud-based platform allows businesses of all sizes to access the same quality of software. With Yooz you'll only pay for what you use when you use it. Easily scalable, the system grows alongside your business.
The ultimate reason that a paperless invoice approval system is a winner
Going electronic is required! And while doing so doesn't require complete automation, the benefits of switching gears to run a completely paperless invoice approval system is a clear win-win from an operational standpoint. It's also a clear win when it comes to Making Tax Digital (MTD) legislation. Instead of mountains of paper and extra work submitting documentation, invoices are electronically validated, data extracted, and information stored (but easily accessed at any time). The amount of errors decreases and both submissions and returns are accomplished faster than in the past.
Simply put, AP automation is the proven way to fire on all cylinders.
Ready to get started? Ask for a free online demo today.
