How does automating your invoice processing help your business?
There’s a very good chance you will have done invoice automation, thought about doing invoice automation, or tried and given up. It’s an obvious saving in so many ways. There are some things it will do, and some things it won’t.
What it won’t do
It will not make you rich.
The cost of processing an invoice manually is often massively overstated. If some of the wilder figures you see relating to ‘how much it costs to process an invoice manually’ and ‘how much you will save by scrapping paper and electronically automating the process’ were accurate, you would have a good number of AP Clerks picking up six figure pay packets. Nice work if you can get it, but not accurate. What makes this worse is that overstating the figures will diminish the credibility of any proposed invoice automation project – and with that – any chance of getting board or executive level buy-in.
It will not change your life overnight.
The best invoice automation projects are phased. Going from having two screens, a tray full of paper and keying invoices in manually to zapping through invoices at the click of a button is a big change from both a process standpoint, and an emotional one. The feeling of actually wanting to hold a physical copy of the invoice you are processing will not go away for a lot of people. This is completely understandable and should not be underestimated if you want buy-in from the AP team. If someone had come up to me 15 years ago, ripped my chequebook out of my hand and gave me a contactless payment card I would have been more than dubious. Parting with money, whether it is your company’s or you own is an emotional decision, and people will almost always want to be certain they are following the correct procedure before doing so. For long-term success the best way is to phase it.
What it will do
You will make savings, and quickly.
While it will not boost profits 100% overnight, a quick payback is certainly doable and should be expected. If you give each AP clerk the tools to help them double the amount of invoices they process per annum – given these tools are typically priced around the mark of one FTE’s salary (not earning six figures) – It’s a big saving. The hidden or soft benefit of this is your AP team will have the time and opportunity to do more things which add real value. You may well have members of your AP team who have Accounting & Finance Degrees, who have AAT qualifications or are working towards CIMA. They may well have a lot more to offer than their current workload permits.
It will make you a better business to work with.
Suppliers do not want to chase invoices, you do not want to take invoice-chasing calls from suppliers. If you can pay now and want to pay now, this should not be held up by a bit of paper getting lost under someone’s desk. Also, if you ever speak to anyone in procurement they will tell you that having a good relationship with your suppliers is gold dust when it comes to renegotiating contracts. When people like working with you, when people find it easy to work with you and want to work with you, they will do so at a more favourable rate because they see as beneficial for everyone.
The team at TouchstoneSpendManagement have done this lots of times before. If you want to learn more about what leads to a successful Invoice Automation project – as well as the pitfalls to look out for – click here to get in touch.