Is invoice management using most of the accounting time at your department? Does your business find itself constantly dealing with delayed payments? Or, do you struggle to clear the ever-ballooning invoice processing backlogs?
If you encounter either of the above issues, it is time to adopt a more innovative solution for streamlining the processing workflow and outsource your invoice processing needs. Invoice management is the backend process in a business dealing with managing all delivery and financial transactions between suppliers or vendors and a company.
Although it may sound simple, it is on the contrary. Managing various invoices from different suppliers and vendors in varying formats may turn out to be a formidable task. Moreover, invoice management may be even more complicated if you manage multiple invoices from a company with multiple locations and different suppliers for every location. So, why is invoice processing outsourcing a smart solution? Below are the main benefits or reasons why you should subcontract your invoice processing needs.
Short Cycle Times
When you outsource your invoice processing needs, invoice data is processed more efficiently and faster. This translates to a shorter payment time. You can receive invoices from many sources in varying templates and formats with invoice processing outsourcing. For instance, you can get the invoices digitally, as physical copies or scanned copies. You then forward the invoices to an outsourcing company that handles all document conversions, standardising all the formats.
Intelligent automation can also be applied in filling any missing information and processing the invoices on a real-time basis to ensure speedy approval and payment. You mail or forward the physical invoices to the outsourcing agency. The agency scans, sorts, and uploads the images to its computer system or the cloud. This significantly reduces the cycle time, enhancing productivity and ensuring supplier satisfaction.
One of the main problems that almost all organisations face during in-house invoice processing is the inevitable human error in the entry and processing of data. This may lead to delayed payments to suppliers or vendors arising from invoice backlog.
The automation of data entry eliminates human error for invoice processing. The intelligent automation can use patterns to automatically fill in any missing details, standardising all the invoice formats and templates for easier processing and speedy approval in multiple levels.
Furthermore, the centralization and standardisation of all the invoice data ease analysing the trends in payments and expenditure. Therefore, you can quickly identify the areas of delay/waste and make the necessary optimizations to your purchases accordingly. The invoice processing outsourcing agencies use a combination of intelligent technologies and human innovation/genius that work in tandem to ensure you get the best solution for invoice processing.
Eliminating Expenses and Lease Obligations
Sorting mail and printing papers makes it necessary to use costly, complex software and massive devices. Such technologies can be expensive to purchase. Although leasing them is also a solution, it can significantly add to your monthly expenses.
Outsourcing your invoice processing eliminates the need for concern with your monthly bills for the equipment’s power consumption or leasing. You won’t have to be worried a printer may break down before you finish the task. Therefore, you can use the money for other purposes while concentrating on other core activities in a Business.
Low Operating Cost
You can significantly reduce the invoice processing costs by outsourcing all your invoice processing needs to a properly-equipped company or team of experts. With cost management, there are three fundamental costs involved in invoice processing:
- Indirect costs: The expenses or costs of hiring the employees to process all the invoice details (entering, updating, and archiving all the invoice data).
- Direct costs: The expenses of processing the invoices physically, mailing, and printing them.
- Hidden Costs: These are the negative cashflows created by an invoice delay or lag.
Hiring an invoice processing outsourcing company streamlines the entire invoice process to hasten the approval process, increase data accuracy, and reduce costs. Because you and your staff are free from the hassles of invoice processing, you can monitor the process to clear out the backlogs, eliminate any errors, and efficiently run daily operations.
Currently, it is estimated that the average invoice processing costs for one invoice in the US are $12 -$30. The labour cost can differ depending on the number of invoices processed daily. Because the outsourcing companies have the requisite technology, they can reduce these costs while operating at a much higher speed, saving you money and time.
Streamlining the approval process
Getting the invoices signed and approved at different levels by multiple approvers is among the biggest challenges in invoice management. Invoice copies may remain hidden or lost in the piles of paper on the desks. Some emails may never be opened because of the numerous business emails that an organisation receives daily.
Your turnaround reduces when your invoice processing is sped up. This simplifies the approval process, resulting in shorter payment and faster approval cycles. When you send the invoices to the invoice processing outsourcing company, they complete multi-way matching, review the invoices and automatically generate and send a notification for approval at multiple levels.
Improved Records and Documentation
If you print and process your invoices and accounts, the chances are high that you do not generate any report as part of that process. However, this is a critical part of documentation and record-keeping. By enlisting the services of an invoice processing outsourcing company, you get three different reports at the end of every task.
Therefore, you can aggregate the documents, identify the wrong addresses and identify any mistake. You will keep accurate data and make decisions based on the correct information.
Mail delivery devices and printers take up some rental space in your office. Other materials like envelopes and paper take up even more space. Many spaces are opened up by outsourcing invoice processing, meaning you will not have to expand the office.
Therefore, you won’t have to pay extra dollars for office expansion or to pay for the space occupied by the printers.
From the above, it is evident there are many benefits or reasons for outsourcing your invoice processing. These outsourcing agencies have automated computer systems that shorten the invoice processing times and differ hiring among many other benefits. Although some feel there are disadvantages of outsourcing their invoice processing, the benefits overshadow the cons. Therefore, leverage the advantages above and outsource your invoice processing needs.