When it comes to invoice processing, the single best way to achieve high efficiency and reduce costs is by adopting an enterprise content management system. ECM, sometimes called document management, equips your accounting department with strategic technologies for automating business processes and storing and retrieving documents electronically.Here are two of the ways that enterprise content management could help your accounting department achieve optimal performance with accounts payable:
- Automating invoice routing: When an invoice arrives in your accounts payable department, it needs to be approved by the person who ordered the goods and services before you pay the invoice. For the greatest efficiency and cost savings, you’d want to route the invoice in such a way that it gets approved and paid as quickly as possible, with no lag time. When your approval process is rapid, organizations with a strong cash position are able to take advantage of early payment discounts, a savings of perhaps 2 to 3 percent.
But this level of efficiency is difficult to achieve when you’re routing paper invoices. It’s easy for an invoice to sit in an approver’s invoice for a week, or go missing altogether, resulting in additional employee hours and missing out on early payment discounts.
With the digital workflows available through an ECM system, however, documents move through your organization as efficiently as possible, responding automatically to any obstacles that arise. If a person is taking a long time to approve an invoice, for example, the system could follow up automatically with a reminder email or escalate the request by forwarding it to the approver’s superior. - Improving accuracy in approvals: When organizations have inefficient invoice processing, approvers tend to wave invoices through because it’s too difficult and time-consuming to check them for accuracy. In a paper-based system, many times it is very time-consuming to retrieve the purchase requisition and price list and check the invoice against them. In this situation, you’re relying on your vendors to be honest and accurate, and run the risk of overpaying.
But with an enterprise content management system, all of the relevant documents are stored in a central repository and instantly accessible when it comes time to approve an invoice. Approvers have more confidence when they sign off on an invoice because it’s easy to answer any questions by looking up the request, purchase order or shipping confirmation. Since it’s convenient for approvers to check invoices, ECM brings greater accuracy to the process and supports good decision-making.
Overall, enterprise content management provides transparency throughout the entire accounts payable process. It allows the CFO to know exactly where an invoice is and who still needs to see it, and makes it easy to reroute the request if an approver is out sick or traveling on business.
In a paper-based system, you’re putting an invoice on someone’s desk and hoping it eventually comes back to you with a stamp or a signature. But when you use ECM to automate your invoice processing, you’re always in control, resulting in greater efficiency and a more effective accounting department.
Learn more about digitizing accounting processes using enterprise content management technology.
