All companies send invoices. From manufacturers to suppliers to healthcare to insurance companies, businesses in general send out invoices to get paid. Depending on the industry, some companies are incredibly heavy invoice processors due to the sheer volume of transactions that take place. An average-sized company, which receives over 3000-5000 invoices, takes about 25 days to manually process a single invoice.
Since invoice processing is generally one of the most time-consuming tasks for companies of all sizes, there are a number of advantages to be gained from automating this business-critical process. By eliminating slow, repetitive tasks such as manual data entry and chasing approvals, finance teams save time and money, while simplifying cross-team collaboration and driving company growth. Traditionally, manual invoice processing starts when the accounting team receives a supplier invoice, either physically or electronically. The invoice is then matched to its purchase order and approved. If the supplier’s invoice bills an exceptionally large amount, then multiple rounds of approval may be required from the company. After approval is granted, the invoice is marked for payment in the books and made to the supplier.
In this post, we break down exactly how automated invoice processing simplifies all the steps of traditional invoicing, the key benefits it brings to your team, and how an automated invoicing solution can help your business.
How does automated digital invoicing work?
Automated digital invoicing ultimately eliminates repetitive manual tasks and reduces errors and delays. Without a centralized digital platform to document the progress of all invoices and expenses, duplicate and late payments are a common struggle for many businesses.
Here’s what it looks like step by step:
- The invoice arrives. It is automatically scanned, and details are fed into the digital system.
- The data is recorded in the digital database.
- The invoice is converted into a text-searchable document that is mapped by the automated management system. This is so the data in the system can be actively tracked within the ERP system.
- The data stored includes the supplier's name, purchase amount, details of the goods/services supplied, etc. and provides an account of the invoice.
- The processed invoice is assigned to the person responsible for approval & payment. If any captured detail does not pass data validation checks, it is held for manual review.
In a recent Quadient-run webinar with Aspire, they shared that it's estimated that by 2024, 47% of transactional communications will be digital only. With automated digital invoicing, your finance team doesn't have to tackle invoices one by one, giving them more time to focus on other pressing or strategic responsibilities.
The benefits of switching to automated digital invoicing
Reduced DSO
Day Sales Outstanding (DSO) is the size of a company’s outstanding accounts measured in sales days. Paper-based invoicing typically leads to higher DSO due to the nature of the system. A digital invoice service reduces DSO by allowing customers to pay immediately thanks to the integration of a secure payment platform. In short, this means companies get paid faster with less concern about long DSOs or unsuccessful payments.
Reduced invoice processing costs
An automated invoicing solution is cheaper than paper invoicing, as it does not require physical infrastructure. It saves on bulk expenditure and employee time, condensing the entire invoicing process into a single platform. It can lead to faster payment cycles, improving cash flow.
Reduced errors and risk
Manual data entry can lead to errors and discrepancies in invoices. Automated digital invoicing minimizes the risk of human error that is inherent with paper methods, leading to more accurate invoices.
Global accessibility
With digital invoicing, businesses can send and receive invoices across geographical boundaries, making it easier to conduct international transactions. Automated systems can also easily scale to accommodate increasing invoice volumes without significant additional effort.
Legislation compliance
Electronic invoicing is quickly becoming the norm, with multiple governments introducing compliance legislation for B2B, B2C, and B2G transactions. Automated invoicing solutions like Impress Invoice are compliant with current legislation, saving businesses from needing to worry about regulatory changes.
Better environmental impact
Going paperless with digital invoicing contributes to environmental sustainability by reducing paper consumption and minimizing the carbon footprint associated with printing and mailing paper invoices.
Improved customer satisfaction
Digital invoices are easier for customers to process and pay, as they can view and pay invoices online from anywhere. This convenience can lead to improved customer satisfaction. Automated invoicing systems often include online payment options, making it easier for customers to pay invoices promptly. Receiving an electronic invoice makes access and payment easier, making the whole process more convenient for the recipient.
The best automated invoice processing software should offer all these benefits in one form or another. The quicker a finance department adopts a digital process, the easier it will be to focus on growth. If your company has yet to switch to automated invoicing, now is the time.
How Impress Invoice can help your business
- As a cloud-based solution, Impress Invoice is infinitely scalable -- it grows as your business does.
- It has a built-in electronic payment platform so clients can pay right away, meaning money is banked faster.
- It's compliant with government-mandated digital invoicing regulations in several countries – futureproofing it as a global digital invoicing solution.
- High-level security is built-in to handle your invoices and payments quickly and without risk.
- The integration of multi-channel invoice-related communications, including contracts, letters, and notifications to keep all your financial documents in a single, easily accessible location.
- It offers personalized branding for your payment platform to ensure a seamless customer experience.
Impress Invoice is a user-friendly SaaS solution that can help simplify the invoicing process for your business. It automates invoice preparation and delivery according to your customers’ channel preference (paper, email, portal, or e-invoicing).
If you’re rethinking how your business processes invoices and are ready to make a digital move, reach out to us here.
