Understanding Invoicing Processing Costs
The payment of invoices is a critical operation for Accounts Payable departments, in which the company’s cash flow is heavily affected. Being able to control payment of invoices, taking advantage of vendor discounts, and having visibility to outstanding invoices are some of the key challenges A/P departments face on a daily basis.
A recent report from the Gartner Group (Accounts Payable Invoice Automation, December 2008) stated that in the US nearly 75 to 80% of invoices are still paper based, implying that most of the cost savings can come from eliminating the paper bottlenecks and improving the process flow.
Paper-based Invoice processing is adding unnecessary costs to your organization, such as:
- Receiving, sorting, distributing invoices manually
- Getting approvals
- Looking for backup documentation such as receiving documents and purchase orders
- Resolving discrepancies
- Manual voucher entry
- Filing and archiving invoices and related documents
Aberdeen Group’s “E-Payables Benchmark Series” published in 2008 sheds some light into the costs associated with handling paper-based Invoices versus Electronic Processing via document imaging and workflow. Their study shows that, on average, companies spend $20.30 for each paper-based PO invoice they process (receipt-to-payment) while the same invoice would cost only $12.60 in electronic format.
For non-PO invoices, costs are even higher reaching $21.10 for a paper invoice versus $14.00 for electronic invoice. The choice is clear. Paper invoices should be eliminated form your payables processes.
IntelliChief helps Accounts Payable departments take control of invoice processing and eliminate the paper that plagues your company. Next: Learn more about how IntelliChief handles invoice processing with the options below.
Basics of Paperless Invoice Processing
- Capturing Incoming Invoices
When Invoices are received via fax, IntelliChief uses FastFax (Quadrant Software’s award winning enterprise fax server) to capture them and place them in an electronic workflow queue. The distribution of this now electronic invoice can be automated so minimal user intervention is required.
For Invoice arriving via email, users can simply capture the attached invoice by “printing to IntelliChief”, which simply means they will send the email attachment to IntelliChief’s electronic image archive using IntelliChief’s Print Capture Driver.
Invoices that arrive via mail, are scanned into IntelliChief so that electronic workflow can do the task of routing them to the appropriate person, eliminating manual handling of paper invoices. Here is where Forms Recognition Technology can play a hand, automating even more the task of processing paper invoices.
- Distributing Invoices
Which invoice should go to Mary? Who handles vendors with names beginning with letters A through D? These and other questions are what constitute your business rules. Depending on your processes and policies invoices need to follow a certain flow. That’s where IntelliChief’s Workflow Engine will kick in and automate the work of distributing invoices to the appropriate person.
- Approving Invoices
For those invoices that require approval before voucher, IntelliChief gives you the power to electronically review and approve the invoice. Every action taken on the invoice is recorded in that document’s history so you can always go back and check when the invoice was sent for approval, who approved it and when. Proxies can be setup in situation where the person is out on vacations. Alerts can tell you whether an invoice is sitting at someone’s inbox for too long. Instead of having to chase after approvals, you will now be able to focus on your work.
- Matching Invoices
If you do 2-way matching or 3-way matching, IntelliChief can help you get the correct documents ready for your review and eliminate the need for you to get up and look for them. The document matching feature allows you to setup rules that will keep documents in workflow until their corresponding documents arrive. Invoices can go to an “Waiting for documents” inbox while waiting for the receiving documents to arrive. Once the receiving documents are in the system and match the invoice, the invoice then is moved to your “Ready for voucher” inbox and can be easily matched against receiver and purchase order.
- Invoice Voucher
After doing the voucher entry, IntelliChief will automatically re-index the invoice image you have on the screen ensuring that indexes are up-to-date with your ERP system. The integration between IntelliChief and your ERP guarantees that document can be retrieved electronically at any time, directly from your ERP screen.
Invoice Processing with Forms Recognition Technology
Forms processing or forms recognition technology allows you to scan invoices and identify the data in the invoice automatically, reducing manual user intervention. Typical benefits are:
- Increase efficiency
- Enhance data accuracy
- Decrease process time
- Reduce cost
- Improve compliance
- Integrate with electronic approval workflow
The more invoices you process on a daily basis, the greater your savings will be. As invoices are scanned, you will be able to:
- Identify and extract key data
- Populate indexes automatically
- Validate data against your ERP system
- Automatically classify and sort invoices
- Automate invoice distribution via electronic workflow
Sign up today for a detailed demonstration of IntelliChief’s forms processing technology, and see for yourself the savings it will bring you.