Interest in back-office technology continues to increase as a way to control costs and increase productivity. While every organization seeking to automate back-office processes carries unique needs, the ultimate goals — particularly along the lines of accounts payable — relate to controlled invoicing and spending in a world that seeks to eliminate paper.
Use of holistic automation tools allows organizations to significantly improve processes, rather than relying on their own manual efforts and antiquated tools. A fully functioning automated invoice management process not only controls the routing of invoices, but also shortens processing times, decreases staff workload, and minimizes the amount of time it takes to pay suppliers.
PayStream Advisors, a research and advisory firm specializing in business process automation, provides a glimpse into invoice management with a key report. This includes information on current trends, benefits of automation, aspects and goals of automated software, and featured providers like Chrome River.
Download the Report: PayStream Advisors’ Invoice Workflow Automation Report
Current Market Trends in Invoice Management
Surveying over 200 back office employees in a variety of contexts, PayStream revealed that adoption rates of integrated workflow automation (IWA) are slow for several reasons. In 2016, less than 40% of organizations surveyed were taking advantage of IWA opportunities, although 32% more plan to implement them in the future.
Organizations find that barriers to employing IWA include lack in the following areas: budget, executive support, technical resources, or understanding of available solutions. Only about 24% of respondents choose not to automate because their current processes are working well. Most organizations, no matter how small or large, reveal that they are simply trying to get by with what they have in order to avoid a considerable investment in software.
While many organizations subscribe to partial automation (using scanning in combination with email), significant opportunities still exist for efficiency, speed, and sustainability completely automated workflow processes. One of the main challenges of workflow processes revealed by this survey is the manual data entry and routing of invoices which can cause approval delays, late payments, supplier concerns, and invoice disputes. In fact, most organizations spend between one and eight hours each week resolving issues related to accounts payable processes. Annually, this can add up to between $1,200 and $24,000 per employee simply to control the damage created by manual AP processes.
Benefits of Invoice Workflow Automation Software
As mentioned, holistic IWA software solutions provide reductions in cost combined with increased employee productivity, faster approval times, and visible liability issues. The features and functionalities of IWA include receipt of invoices, matching, routing, approval, payment, reconciliation, reporting, and analytics tools.
As invoices are received, they must be input into the organization’s system. One option includes a service to eliminate paper invoice handling and data entry. Scanning, optical character recognition (OCR), and e-Invoicing are used by IWA software to capture and validate information automatically. The technology in automated systems affirms the integrity of business documents and ensures precision, compliance, and consistency to streamline later points of the AP process.
Matching and Routing
AP workflow automation software allows departments to set parameters for how invoices should be matched and processed through appropriate approval chains. Systems can be set to give administrators control over individual access and established thresholds, while notifications and workflow may be driven based on invoice content and categories. Because of the accuracy of matching systems, organizations can quickly and automatically pay low-value, recurring invoices that meet validation parameters, saving staff intervention only for exceptions.
After the validation, matching, and routing processes have been completed the stage for approval is set. From here, invoices move forward in a timely manner to get them paid as quickly as possible. Built to be configured to the specific needs of different organizations, IWA approval processes allow for adjustment related to document content as well as legal requirements and rules within the business. Automated AP business rules may be set up to generate notifications for the approver in order to keep the process moving efficiently, allowing for prioritization and workload balance.
Payment and Reconciliation
Once invoice approval is obtained, IWA allows for automatic payment workflows with integration of ACH information and back-end accounts receivable systems. Electronic payment solutions allow for the entire lifecycle of the invoice to be completely automated with virtual card solutions and even web-pay portals.
Reporting and Analytics Tools
Boosting an organization’s ability for auditing and spend analytics, IWA allows for complete transparency which promotes the improvement of procedures that may not be working as well. Success rates, exception rates, and open invoices can be analyzed and benchmarked in order to review opportunities for the organization to develop. Auditing technology also allows for integration with accounting applications for smooth overall functioning of the organization.
Improving efficiency, reducing costs, supplier participation, paperless functioning, mobility, and increasing speed all encompass the most important goals organizations are hoping to achieve with IWA software implementation. PayStream features Chrome River as having leading invoice management software that helps organizations accomplish their AP goals.
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