Streamlining and automating financial routines has become key in improving the bottom line for many top companies. But it’s not just for big, lucrative businesses. Today’s remote work environment has kind of proven that eProcurement and invoicing processes are highly essential to maintaining liquid cash flowing during unfortunate and unexpected times. Gone are the days when digitization was exclusively meant for companies that are on the lookout to change their finance and procurement departments. Years later, it is now a mode of survival, as organizations steer their “new normal.” One way organizations are becoming more efficient is by streamlining PO invoicing.
Streamlining PO invoicing: The Top 3 Benefits
1. Minimize financial burdens
Streamlining and automating your PO invoicing will help you minimize numerous unnecessary costs. Every single invoice will take several hours and resources to process. For example, if you process 100,000 invoices every year, every invoice would have to through a bunch of routine steps.
If it’s a paper format, then the envelope will be stored or downloaded if it’s in PDF format. Once it is done, the paper format invoice will be scanned and will manually enter the invoice information into the system. The procurement team will then validate data and ensure all the information is right. In case there are errors or mistakes found in the invoice, the team will call the supplier to get more information or clear any related queries. and finally, manual data enrichment.
Completing all these steps for every single invoice will take days of your employees’ time. According to Gainfront’s experts, the average cost per invoice is around $9 in just cycle time and processing expenses. Lost invoices are a separate matter. Considering the average cost, the extra costs would add up to $900,000 per year just for PO invoicing. Imagine that.
2. Cut down the manual process
Once you streamline your PO invoicing, not only can you save financial resources, but also your valuable employee resources. The financial team is the backbone of any organization. So when you start streamlining and automating these processes, it’s your team that is eventually going to benefit.
Of course, there are endless automation tools that do a fantastic job, however, the easiest and smartest way to completely eliminate manual work is by making sure that the data you enter into your system is 100% accurate. This will improve your approval system and decrease unnecessary steps in the process.
In other terms, the less manual work your PO invoicing needs, the more time your financial and procurement departments can focus on other important activities that can assist your business in growing and sustaining itself. Apart from your, your suppliers are also going to benefit from your automated PO invoicing as it will let them digitize their supplier process.
3. Accurate information
Another important benefit of streamlining your PO invoicing is that you can make sure that you are getting 100% accurate information. Well, the more accurate invoice is, the less time it will take to fix any mistakes or make corrections. Let’s take the same 100,000 invoices a year example. If you manually enter all those invoices’ data into the system, there could be numerous entry errors which is one of the biggest issues for the accounts payable team. The more data to enter manually, the higher the chance for entry errors. Now, streamlining the entire process can minimize the probability of those errors and promotes an efficient approval process, assisting you in making better, informed, and smarter decisions.
Now that you have taken a good look at why you should streamline PO invoicing, let’s check out a few tips on how to improve and streamline PO invoicing.
1. A single point of contact
Just like you assign roles for every single designation and job activity, for the benefit of accounts payable and enterprise, there must be a single point of contact for invoices as:
- It enables one designated processing party to collect and process received invoices against their respective purchase orders faster, allowing for simpler and quicker vendor payments.
- It enhances internal control when a three-way match is needed verification before sharing details with the finance department as shared information doesn’t require updating due to inaccuracies.
- It ensures a safety check against fraud by cross verifying that orders were indeed placed for the invoices that are being received.
2. Robust software for purchasing & accounts payable
Organizations that handle large purchasing orders rarely operate without decent software that can assist them with their operations. However, most of the time, enterprises depend on cumbersome ERP solutions that need a lot of effort and resources to manage while startups kind of run their business with a mere spreadsheet.
But there are more efficient and effective solutions are available to handle accounts payable electronically with much ease. The amount of time saved by utilizing such robust and smart tools to automate and streamline the accounts payable process is worth the monetary investment for any enterprise.
By deploying good software, not only will you be streamlining your purchasing and accounting processes but also save a ton of time for your team through automated PO and invoice processing.
3. Get your team’s opinion
No matter how efficient the software is, you should get your team involved before purchasing the software. Why? Because at the end of the day, it’s your team who is going to use the software so getting their opinions and thoughts is equally important.
Most of the solutions today are providing a live demo and trial versions so it is definitely worth getting your team to participate in the evaluation process before you decide which software to purchase.
Streamlining your business processes using modern, cutting-edge technology creates a win-win situation for the supplier and enterprise. You being the buyer will be able to save a ton of time and resources, building a positive business relationship as your supplier will get paid faster. With the money and resources saved by using efficient software, you can plan how to use them for your enterprise’s further growth.