When you evaluate a Document Management solution to automate invoice processing, you’ll have a lot of questions. This blog post describes the essential aspects of digitizing these processes. Once you have a good grasp of how accounts payable systems are automated, you’ll have the working knowledge you need to make an educated decision and choose the right solution for your organization.
Challenges accounts payable faces without workflow automation
An accounts payable (AP) team does more than just pay the bills. They also reconcile an invoice with the purchase order and delivery ticket, maintain vendor relationships and negotiate credit terms.
It makes sense not to weigh down AP staff with time-consuming, manual, paper-based tasks. These are just a few of the obstacles that manual processes create.
Some common downsides of paper process
- Employees waste time filing and retrieving paper invoices. They also expend extra effort searching for lost or misfiled invoices and correcting mistakes.
- Manual data entry is time-consuming and error-prone.
- A paper accounting archive takes up space that could be repurposed or is housed in expensive, off-site storage.
- No way to flag duplicates or overpayments and correcting these errors costs time, and money and creates extra work.
- Invoices that arrive by email are printed out and processed like paper.
Slow approvals cause other issues besides delayed payments
- Late payments result in problems like extra fees and credit holds that may lead to the suspension of deliveries.
- Approvals may stall because an approver is out of the office or the invoice is routed to the wrong person.
- There is no way to automatically route invoices to the correct cost center or to pass invoices under a certain amount through without approval.
- There’s no mobile or remote access so invoices can only be reviewed and approved in the office.
Lack of information for monitoring cash flow and intelligent workforce planning
- The inability to generate an overview that gives an accurate, real-time overview of monthly spending and outstanding payables has a negative impact on cash flow
- No insight into how many invoices are assigned to each staff member interferes with resource planning
- When an uptick in sales results in an increased number of incoming invoices, additional employees have to be hired
Error-proofing invoice processing
When invoice processing is completely automated, every step is well defined from data capture to approval to generating a transaction record for posting directly to your accounting or ERP system. The solution should trigger approval workflows based on your business rules to ensure accurate and rapid processing. It should check mandatory data, purchase orders, duplicate invoices, and onboard new vendors quickly. The system should also integrate directly with your accounting or ERP system to eliminate duplicate data entry and manual errors. A digital invoice processing solution delivers many productivity benefits. With an automated system, your accounting staff can:
- Capture invoices using artificial intelligence. The power of our solution starts with DocuWare Intelligent Indexing, a machine-learning system that understands and extracts data from any invoice. This critical index data drives workflow processes. DocuWare Intelligent Indexing replaces error-prone and time-consuming manual data entry by recognizing and recording unstructured data on invoices.
- Securely store and effortlessly archive and retrieve digital documents. All invoices are stored within a secure, accessible repository and are tightly organized based on captured index data. Apply retention policies, rapidly collect for audits, or analyze for departmental process improvements. Access anytime, anywhere, from any device — including mobile.
Automated workflows are the key to success
Digital workflows automate, track, and report on any accounting process. A comprehensive digital workflow allows you to track a document at any stage of the process life cycle. A full range of reports enables you to see how many documents are at any given process stage. The invoice processing workflow should automatically check for duplicate invoices and determine if a vendor is already in the system. If not, the solution should initiate an automated vendor onboarding process. This built-in verification helps eliminate fraudulent invoices.
Automation enables sharing information with anyone on your team who needs visibility into a workflow process. Every employee responsible for completing a particular task can view it in the office automation solution. Email updates can be sent to alert employees to new tasks in their work queues. Exceptions and escalations can be configured easily. At a glance, a manager can see what steps are complete and what remains to be done.
Protecting proprietary data is a number one priority for most organizations. Security is a big concern when documents are stored in a digital archive. Not only do strong security and backup measures ensure information recovery in the case of a disaster, but they keep unauthorized employees out and help meet critical compliance requirements.
What exactly should your invoice processing solution do?
Your solution should enable these key functions:
- Capture invoices from a scanner, MFP, email, a watched folder or drag-n-drop from your desktop.
- Keep track of payment due dates and send email reminders.
- Validate and route invoices based on the business rules you define.
- Retrieve related documents directly from the document management system without leaving other business software such as your accounting system.
- Provide an overview of invoices, GL coding, and approval processes.
- Supply downloadable data for input to your accounting or ERP system.
- Enable mobile access to allow authorized personnel to approve invoices from any device at any time.
- Offer robust integration capabilities that work seamlessly within your IT ecosystem. The invoice processing automation solution should integrate across email, team portals, CRM, ERP, HR systems, and homegrown software.
A quick start with preconfigured cloud solutionsAutomating AP doesn’t have to require a large time commitment from your staff or a long, drawn-out implementation. Although business processes differ from company to company, they share key requirements and decision points.
DocuWare for Invoice Processing is a preconfigured cloud solution with prebuilt workflows based on these common denominators. It can be easily adapted to fit your business rules, so the solution can be up and running within a few days. Watch this practical and engaging recorded demo to find out more.
Invoice processing automation has a positive impact at Lawrence Paper Company
With about 215 employees at its Kansas location, Lawrence Paper Company produces a variety of boxes and packaging materials, ranging from simple brown boxes to items large enough to hold auto parts. The company serves about 2,000 customers ranging from pet food producers to beer brewers, from industrial to retail, and from manufacturing to the automotive industry. Last year, it made enough corrugated sheets to circumnavigate the globe. That volume of work requires precise recordkeeping, which generated a lot of paper. “We’ve been around for so long that we have been doing things the same way for 30 to 40 years,” says Mike Cordaro, IT Specialist & Special Projects Manager. “There was a lot of paper pushing between different departments. We wanted to be more efficient.”
After analyzing the potential performance improvement, Lawrence Paper Company made the decision to go digital. “We thought it would be a good idea from the performance perspective—instead of looking for sheets of paper stuffed inside cabinets,” Cordaro says. “When we installed DocuWare, we had a big shredding party, got rid of the file cabinets and freed up office space.”
Streamlining invoice processing workflow
The company started its digital transformation in the Accounting department. Prior to DocuWare, when an employee made a purchase, they would initiate a paper trail. A paper-based purchase order would circulate between seven different people and would then be stored in a file cabinet. DocuWare made it easier to reconcile in the company’s enterprise resource planning (ERP) system and streamline the work of the Accounts Payable team. “We went from processing 15 invoices a day to processing 100 invoices a day,” Cordaro says. With 35 DocuWare users, 10 to 12 of whom upload files, and the rest act as approvers, the company accumulated over 150,000 documents since installation. The employees particularly enjoy the Intelligent Indexing feature that allows them to automatically file documents from the company’s internal reporting software, iSeries, which speeds up their work.
You want to make your wishes come true? The right solution for you: