The Problem with Inefficient Invoicing
Invoicing Is Complex
In support of our upcoming webinar, I’m going to spend the next month discussing workflows that can increase your agency’s efficiencies. Invoicing is a challenging area for many clients. No matter how much accounts payable (AP) automation is in place, the problem is that unanticipated and non-standard supplier invoice formats will always need to be processed. Often, this issue seems unsolvable, and it runs counter to many flexible and robust workflows that normally get transaction information correct and help reduce your AP workload.
An invoice workflow is a process by which invoices are routed and approved. The invoice process can vary from agency to agency, but the goal is to accept invoices and enable them to enter the system with little manual oversight efficiently. However, challenges impede a 100% processing rate.
Invoice inputs and delivery can diverge- Paper invoices will most often slow down your process. The paper must be removed from the envelope, the inevitable staple pulled out, scanned, and verified before approvals can even start. In addition, invoices can come from various sources, from the buyers, over email, text, and FTP. Overall, the accounting staff needs to centralize invoices so they can be processed.
The format of the invoice can vary- Troublingly, even if an invoice is in a standard PDF or MSWord format, the data within the document must be grabbed and translated—for example, the payment terms, the total invoice amount, billing codes, etc. Almost always, there needs to be an intensive human-led QC process.
Disparate systems- Invoices are often handled by incomplete, inadequate, point solutions, rather than being a part of an entire supplier payment process. This results in users using multiple applications (ECM, ERP, etc.) Without complex integrations, this can mean numerous steps and an increased likelihood of errors.
Paid invoice, or not- Because of disconnected systems, it can be difficult to determine the payment status of an invoice. The reporting loop is often left until manual reconciliation. This divide can negatively impact month-end close and possibly hinder cash flow insight.
Now that we’ve discussed the fundamental issues with invoicing are you interested in learning how to create a successful invoice workflow? If so, stay tuned for my next blog post, where I’ll discuss how a successful invoice workflow will function. Meanwhile, we are developing an invoice demo for our September webinar.